Correlation Between DermTech and Hydrofarm Holdings
Can any of the company-specific risk be diversified away by investing in both DermTech and Hydrofarm Holdings 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 DermTech and Hydrofarm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DermTech and Hydrofarm Holdings Group, you can compare the effects of market volatilities on DermTech and Hydrofarm Holdings 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 DermTech with a short position of Hydrofarm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of DermTech and Hydrofarm Holdings.
Diversification Opportunities for DermTech and Hydrofarm Holdings
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DermTech and Hydrofarm is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding DermTech and Hydrofarm Holdings Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrofarm Holdings and DermTech 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 DermTech are associated (or correlated) with Hydrofarm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydrofarm Holdings has no effect on the direction of DermTech i.e., DermTech and Hydrofarm Holdings go up and down completely randomly.
Pair Corralation between DermTech and Hydrofarm Holdings
If you would invest 61.00 in Hydrofarm Holdings Group on October 26, 2024 and sell it today you would earn a total of 2.62 from holding Hydrofarm Holdings Group or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
DermTech vs. Hydrofarm Holdings Group
Performance |
| Timeline |
| DermTech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hydrofarm Holdings |
DermTech and Hydrofarm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DermTech and Hydrofarm Holdings
The main advantage of trading using opposite DermTech and Hydrofarm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DermTech position performs unexpectedly, Hydrofarm Holdings 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 Hydrofarm Holdings will offset losses from the drop in Hydrofarm Holdings' long position.| DermTech vs. TransMedics Group | DermTech vs. Curiositystream | DermTech vs. Fulgent Genetics | DermTech vs. Outset Medical |
| Hydrofarm Holdings vs. Gencor Industries | Hydrofarm Holdings vs. CEA Industries | Hydrofarm Holdings vs. Arts Way Manufacturing Co | Hydrofarm Holdings vs. CubicFarm Systems Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |