Correlation Between Hayward Holdings and Exro Technologies
Can any of the company-specific risk be diversified away by investing in both Hayward Holdings and Exro Technologies 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 Exro Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hayward Holdings and Exro Technologies, you can compare the effects of market volatilities on Hayward Holdings and Exro Technologies 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 Exro Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hayward Holdings and Exro Technologies.
Diversification Opportunities for Hayward Holdings and Exro Technologies
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hayward and Exro is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hayward Holdings and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies 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 Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of Hayward Holdings i.e., Hayward Holdings and Exro Technologies go up and down completely randomly.
Pair Corralation between Hayward Holdings and Exro Technologies
Given the investment horizon of 90 days Hayward Holdings is expected to generate 0.32 times more return on investment than Exro Technologies. However, Hayward Holdings is 3.13 times less risky than Exro Technologies. It trades about 0.06 of its potential returns per unit of risk. Exro Technologies is currently generating about -0.08 per unit of risk. If you would invest 1,262 in Hayward Holdings on August 29, 2024 and sell it today you would earn a total of 371.00 from holding Hayward Holdings or generate 29.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hayward Holdings vs. Exro Technologies
Performance |
| Timeline |
| Hayward Holdings |
| Exro Technologies |
Hayward Holdings and Exro Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hayward Holdings and Exro Technologies
The main advantage of trading using opposite Hayward Holdings and Exro Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hayward Holdings position performs unexpectedly, Exro Technologies 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 Exro Technologies will offset losses from the drop in Exro Technologies' long position.| Hayward Holdings vs. Kimball Electronics | Hayward Holdings vs. Enersys | Hayward Holdings vs. Espey Mfg Electronics | Hayward Holdings vs. Energizer Holdings |
| Exro Technologies vs. Novonix Ltd ADR | Exro Technologies vs. Magnis Energy Technologies | Exro Technologies vs. Ilika plc | Exro Technologies vs. FuelPositive 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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