Correlation Between Hayward Holdings and Hollysys Automation
Can any of the company-specific risk be diversified away by investing in both Hayward Holdings and Hollysys Automation 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 Hollysys Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hayward Holdings and Hollysys Automation Technologies, you can compare the effects of market volatilities on Hayward Holdings and Hollysys Automation 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 Hollysys Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hayward Holdings and Hollysys Automation.
Diversification Opportunities for Hayward Holdings and Hollysys Automation
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hayward and Hollysys is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hayward Holdings and Hollysys Automation Technologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollysys Automation 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 Hollysys Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollysys Automation has no effect on the direction of Hayward Holdings i.e., Hayward Holdings and Hollysys Automation go up and down completely randomly.
Pair Corralation between Hayward Holdings and Hollysys Automation
Given the investment horizon of 90 days Hayward Holdings is expected to generate 1.58 times less return on investment than Hollysys Automation. In addition to that, Hayward Holdings is 1.25 times more volatile than Hollysys Automation Technologies. It trades about 0.04 of its total potential returns per unit of risk. Hollysys Automation Technologies is currently generating about 0.08 per unit of volatility. If you would invest 1,789 in Hollysys Automation Technologies on August 28, 2024 and sell it today you would earn a total of 853.00 from holding Hollysys Automation Technologies or generate 47.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 75.71% |
| Values | Daily Returns |
Hayward Holdings vs. Hollysys Automation Technologi
Performance |
| Timeline |
| Hayward Holdings |
| Hollysys Automation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hayward Holdings and Hollysys Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hayward Holdings and Hollysys Automation
The main advantage of trading using opposite Hayward Holdings and Hollysys Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hayward Holdings position performs unexpectedly, Hollysys Automation 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 Hollysys Automation will offset losses from the drop in Hollysys Automation'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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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