Correlation Between Brockhaus Capital and Honeywell International
Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital and Honeywell International 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 Brockhaus Capital and Honeywell International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and Honeywell International, you can compare the effects of market volatilities on Brockhaus Capital and Honeywell International 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 Brockhaus Capital with a short position of Honeywell International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and Honeywell International.
Diversification Opportunities for Brockhaus Capital and Honeywell International
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brockhaus and Honeywell is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management and Honeywell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honeywell International and Brockhaus Capital 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 Brockhaus Capital Management are associated (or correlated) with Honeywell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honeywell International has no effect on the direction of Brockhaus Capital i.e., Brockhaus Capital and Honeywell International go up and down completely randomly.
Pair Corralation between Brockhaus Capital and Honeywell International
Assuming the 90 days trading horizon Brockhaus Capital Management is expected to generate 0.99 times more return on investment than Honeywell International. However, Brockhaus Capital Management is 1.01 times less risky than Honeywell International. It trades about 0.14 of its potential returns per unit of risk. Honeywell International is currently generating about -0.07 per unit of risk. If you would invest 2,340 in Brockhaus Capital Management on October 30, 2024 and sell it today you would earn a total of 110.00 from holding Brockhaus Capital Management or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brockhaus Capital Management vs. Honeywell International
Performance |
| Timeline |
| Brockhaus Capital |
| Honeywell International |
Brockhaus Capital and Honeywell International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brockhaus Capital and Honeywell International
The main advantage of trading using opposite Brockhaus Capital and Honeywell International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital position performs unexpectedly, Honeywell International 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 Honeywell International will offset losses from the drop in Honeywell International's long position.| Brockhaus Capital vs. United Natural Foods | Brockhaus Capital vs. Ebro Foods SA | Brockhaus Capital vs. Lery Seafood Group | Brockhaus Capital vs. CAL MAINE FOODS |
| Honeywell International vs. FAIR ISAAC | Honeywell International vs. ULTRA CLEAN HLDGS | Honeywell International vs. Vulcan Materials | Honeywell International vs. Sumitomo Rubber Industries |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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