Correlation Between Ashland Global and Hawkins
Can any of the company-specific risk be diversified away by investing in both Ashland Global and Hawkins 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 Ashland Global and Hawkins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashland Global Holdings and Hawkins, you can compare the effects of market volatilities on Ashland Global and Hawkins 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 Ashland Global with a short position of Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashland Global and Hawkins.
Diversification Opportunities for Ashland Global and Hawkins
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ashland and Hawkins is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ashland Global Holdings and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins and Ashland Global 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 Ashland Global Holdings are associated (or correlated) with Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Ashland Global i.e., Ashland Global and Hawkins go up and down completely randomly.
Pair Corralation between Ashland Global and Hawkins
Considering the 90-day investment horizon Ashland Global Holdings is expected to under-perform the Hawkins. But the stock apears to be less risky and, when comparing its historical volatility, Ashland Global Holdings is 1.66 times less risky than Hawkins. The stock trades about -0.1 of its potential returns per unit of risk. The Hawkins is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 12,262 in Hawkins on August 28, 2024 and sell it today you would earn a total of 1,285 from holding Hawkins or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashland Global Holdings vs. Hawkins
Performance |
| Timeline |
| Ashland Global Holdings |
| Hawkins |
Ashland Global and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashland Global and Hawkins
The main advantage of trading using opposite Ashland Global and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashland Global position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.| Ashland Global vs. Oil Dri | Ashland Global vs. H B Fuller | Ashland Global vs. Northern Technologies | Ashland Global vs. Cabot |
| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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