Correlation Between Coloplast A/S and Hoya Corp
Can any of the company-specific risk be diversified away by investing in both Coloplast A/S 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 Coloplast A/S and Hoya Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloplast AS and Hoya Corp, you can compare the effects of market volatilities on Coloplast A/S 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 Coloplast A/S with a short position of Hoya Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloplast A/S and Hoya Corp.
Diversification Opportunities for Coloplast A/S and Hoya Corp
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Coloplast and Hoya is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Coloplast AS and Hoya Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoya Corp and Coloplast A/S 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 Coloplast AS 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 Coloplast A/S i.e., Coloplast A/S and Hoya Corp go up and down completely randomly.
Pair Corralation between Coloplast A/S and Hoya Corp
Assuming the 90 days horizon Coloplast AS is expected to under-perform the Hoya Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Coloplast AS is 1.15 times less risky than Hoya Corp. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Hoya Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 13,143 in Hoya Corp on August 28, 2024 and sell it today you would lose (285.00) from holding Hoya Corp or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloplast AS vs. Hoya Corp
Performance |
| Timeline |
| Coloplast A/S |
| Hoya Corp |
Coloplast A/S and Hoya Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloplast A/S and Hoya Corp
The main advantage of trading using opposite Coloplast A/S and Hoya Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloplast A/S 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.| Coloplast A/S vs. Sysmex Corp | Coloplast A/S vs. Straumann Holding AG | Coloplast A/S vs. Essilor International SA | Coloplast A/S vs. EssilorLuxottica Socit anonyme |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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