Correlation Between APS Energia and HM Inwest
Can any of the company-specific risk be diversified away by investing in both APS Energia and HM Inwest 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 APS Energia and HM Inwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APS Energia SA and HM Inwest SA, you can compare the effects of market volatilities on APS Energia and HM Inwest 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 APS Energia with a short position of HM Inwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of APS Energia and HM Inwest.
Diversification Opportunities for APS Energia and HM Inwest
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between APS and HMI is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding APS Energia SA and HM Inwest SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HM Inwest SA and APS Energia 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 APS Energia SA are associated (or correlated) with HM Inwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HM Inwest SA has no effect on the direction of APS Energia i.e., APS Energia and HM Inwest go up and down completely randomly.
Pair Corralation between APS Energia and HM Inwest
Assuming the 90 days trading horizon APS Energia is expected to generate 12.59 times less return on investment than HM Inwest. But when comparing it to its historical volatility, APS Energia SA is 1.07 times less risky than HM Inwest. It trades about 0.01 of its potential returns per unit of risk. HM Inwest SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 822.00 in HM Inwest SA on August 30, 2024 and sell it today you would earn a total of 3,998 from holding HM Inwest SA or generate 486.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
APS Energia SA vs. HM Inwest SA
Performance |
| Timeline |
| APS Energia SA |
| HM Inwest SA |
APS Energia and HM Inwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APS Energia and HM Inwest
The main advantage of trading using opposite APS Energia and HM Inwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APS Energia position performs unexpectedly, HM Inwest 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 HM Inwest will offset losses from the drop in HM Inwest's long position.| APS Energia vs. Asseco Business Solutions | APS Energia vs. Detalion Games SA | APS Energia vs. Asseco South Eastern | APS Energia vs. Vercom SA |
| HM Inwest vs. True Games Syndicate | HM Inwest vs. Tower Investments SA | HM Inwest vs. Kool2play SA | HM Inwest vs. Gaming Factory SA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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