Correlation Between Danimer Scientific and Hydrofarm Holdings
Can any of the company-specific risk be diversified away by investing in both Danimer Scientific 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 Danimer Scientific and Hydrofarm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danimer Scientific and Hydrofarm Holdings Group, you can compare the effects of market volatilities on Danimer Scientific 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 Danimer Scientific with a short position of Hydrofarm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danimer Scientific and Hydrofarm Holdings.
Diversification Opportunities for Danimer Scientific and Hydrofarm Holdings
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Danimer and Hydrofarm is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Danimer Scientific and Hydrofarm Holdings Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrofarm Holdings and Danimer Scientific 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 Danimer Scientific 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 Danimer Scientific i.e., Danimer Scientific and Hydrofarm Holdings go up and down completely randomly.
Pair Corralation between Danimer Scientific and Hydrofarm Holdings
Given the investment horizon of 90 days Danimer Scientific is expected to under-perform the Hydrofarm Holdings. In addition to that, Danimer Scientific is 4.47 times more volatile than Hydrofarm Holdings Group. It trades about -0.48 of its total potential returns per unit of risk. Hydrofarm Holdings Group is currently generating about 0.07 per unit of volatility. 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 | 36.84% |
| Values | Daily Returns |
Danimer Scientific vs. Hydrofarm Holdings Group
Performance |
| Timeline |
| Danimer Scientific |
| Hydrofarm Holdings |
Danimer Scientific and Hydrofarm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danimer Scientific and Hydrofarm Holdings
The main advantage of trading using opposite Danimer Scientific and Hydrofarm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danimer Scientific 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.| Danimer Scientific vs. LyondellBasell Industries NV | Danimer Scientific vs. International Flavors Fragrances | Danimer Scientific vs. Cabot | Danimer Scientific vs. Westlake Chemical |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| CEOs Directory Screen CEOs from public companies around the world |