Correlation Between Hawkeye Gold and Leons Furniture
Can any of the company-specific risk be diversified away by investing in both Hawkeye Gold and Leons Furniture 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 Hawkeye Gold and Leons Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawkeye Gold and and Leons Furniture Limited, you can compare the effects of market volatilities on Hawkeye Gold and Leons Furniture 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 Hawkeye Gold with a short position of Leons Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkeye Gold and Leons Furniture.
Diversification Opportunities for Hawkeye Gold and Leons Furniture
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hawkeye and Leons is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hawkeye Gold and and Leons Furniture Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leons Furniture and Hawkeye Gold 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 Hawkeye Gold and are associated (or correlated) with Leons Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leons Furniture has no effect on the direction of Hawkeye Gold i.e., Hawkeye Gold and Leons Furniture go up and down completely randomly.
Pair Corralation between Hawkeye Gold and Leons Furniture
Assuming the 90 days trading horizon Hawkeye Gold and is expected to under-perform the Leons Furniture. In addition to that, Hawkeye Gold is 2.11 times more volatile than Leons Furniture Limited. It trades about -0.31 of its total potential returns per unit of risk. Leons Furniture Limited is currently generating about 0.01 per unit of volatility. If you would invest 2,462 in Leons Furniture Limited on November 28, 2024 and sell it today you would lose (3.00) from holding Leons Furniture Limited or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawkeye Gold and vs. Leons Furniture Limited
Performance |
| Timeline |
| Hawkeye Gold |
| Leons Furniture |
Hawkeye Gold and Leons Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawkeye Gold and Leons Furniture
The main advantage of trading using opposite Hawkeye Gold and Leons Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkeye Gold position performs unexpectedly, Leons Furniture 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 Leons Furniture will offset losses from the drop in Leons Furniture's long position.| Hawkeye Gold vs. Algoma Steel Group | Hawkeye Gold vs. Storage Vault Canada | Hawkeye Gold vs. Diversified Royalty Corp | Hawkeye Gold vs. Costco Wholesale Corp |
| Leons Furniture vs. High Liner Foods | Leons Furniture vs. Richelieu Hardware | Leons Furniture vs. North West | Leons Furniture vs. Toromont 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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