Correlation Between Hayward Holdings and Espey Mfg
Can any of the company-specific risk be diversified away by investing in both Hayward Holdings and Espey Mfg 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 Hayward Holdings and Espey Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hayward Holdings and Espey Mfg Electronics, you can compare the effects of market volatilities on Hayward Holdings and Espey Mfg 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 Hayward Holdings with a short position of Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hayward Holdings and Espey Mfg.
Diversification Opportunities for Hayward Holdings and Espey Mfg
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hayward and Espey is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hayward Holdings and Espey Mfg Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Espey Mfg Electronics and Hayward Holdings 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 Hayward Holdings are associated (or correlated) with Espey Mfg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Espey Mfg Electronics has no effect on the direction of Hayward Holdings i.e., Hayward Holdings and Espey Mfg go up and down completely randomly.
Pair Corralation between Hayward Holdings and Espey Mfg
Given the investment horizon of 90 days Hayward Holdings is expected to generate 0.81 times more return on investment than Espey Mfg. However, Hayward Holdings is 1.24 times less risky than Espey Mfg. It trades about -0.02 of its potential returns per unit of risk. Espey Mfg Electronics is currently generating about -0.08 per unit of risk. If you would invest 1,518 in Hayward Holdings on November 3, 2024 and sell it today you would lose (12.00) from holding Hayward Holdings or give up 0.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hayward Holdings vs. Espey Mfg Electronics
Performance |
| Timeline |
| Hayward Holdings |
| Espey Mfg Electronics |
Hayward Holdings and Espey Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hayward Holdings and Espey Mfg
The main advantage of trading using opposite Hayward Holdings and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hayward Holdings position performs unexpectedly, Espey Mfg 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 Espey Mfg will offset losses from the drop in Espey Mfg's long position.| Hayward Holdings vs. Kimball Electronics | Hayward Holdings vs. Enersys | Hayward Holdings vs. Espey Mfg Electronics | Hayward Holdings vs. Energizer Holdings |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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