Correlation Between Fact and Hhgregg
Can any of the company-specific risk be diversified away by investing in both Fact and Hhgregg 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 Fact and Hhgregg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fact Inc and Hhgregg, you can compare the effects of market volatilities on Fact and Hhgregg 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 Fact with a short position of Hhgregg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fact and Hhgregg.
Diversification Opportunities for Fact and Hhgregg
No risk reduction
The 3 months correlation between Fact and Hhgregg is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Fact Inc and Hhgregg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hhgregg and Fact 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 Fact Inc are associated (or correlated) with Hhgregg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hhgregg has no effect on the direction of Fact i.e., Fact and Hhgregg go up and down completely randomly.
Pair Corralation between Fact and Hhgregg
If you would invest 0.02 in Hhgregg on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Hhgregg or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 0.79% |
| Values | Daily Returns |
Fact Inc vs. Hhgregg
Performance |
| Timeline |
| Fact Inc |
| Hhgregg |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fact and Hhgregg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fact and Hhgregg
The main advantage of trading using opposite Fact and Hhgregg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fact position performs unexpectedly, Hhgregg 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 Hhgregg will offset losses from the drop in Hhgregg's long position.The idea behind Fact Inc and Hhgregg pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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