Correlation Between Ansell and Hoya Corp
Can any of the company-specific risk be diversified away by investing in both Ansell and Hoya Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ansell and Hoya Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ansell Limited and Hoya Corp, you can compare the effects of market volatilities on Ansell and Hoya Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ansell with a short position of Hoya Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ansell and Hoya Corp.
Diversification Opportunities for Ansell and Hoya Corp
Very good diversification
The 3 months correlation between Ansell and Hoya is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ansell Limited and Hoya Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoya Corp and Ansell is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ansell Limited are associated (or correlated) with Hoya Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoya Corp has no effect on the direction of Ansell i.e., Ansell and Hoya Corp go up and down completely randomly.
Pair Corralation between Ansell and Hoya Corp
Assuming the 90 days horizon Ansell Limited is expected to generate 0.1 times more return on investment than Hoya Corp. However, Ansell Limited is 9.89 times less risky than Hoya Corp. It trades about -0.21 of its potential returns per unit of risk. Hoya Corp is currently generating about -0.04 per unit of risk. If you would invest 2,100 in Ansell Limited on August 28, 2024 and sell it today you would lose (20.00) from holding Ansell Limited or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ansell Limited vs. Hoya Corp
Performance |
| Timeline |
| Ansell Limited |
| Hoya Corp |
Ansell and Hoya Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ansell and Hoya Corp
The main advantage of trading using opposite Ansell and Hoya Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ansell position performs unexpectedly, Hoya Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hoya Corp will offset losses from the drop in Hoya Corp's long position.| Ansell vs. Straumann Holding AG | Ansell vs. Utah Medical Products | Ansell vs. AngioDynamics | Ansell vs. AtriCure |
| Hoya Corp vs. GlucoTrack | Hoya Corp vs. Sharps Technology | Hoya Corp vs. Utah Medical Products | Hoya Corp vs. Innovative Eyewear |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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