Correlation Between Hosken Consolidated and Allied Electronics
Can any of the company-specific risk be diversified away by investing in both Hosken Consolidated and Allied Electronics 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 Hosken Consolidated and Allied Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hosken Consolidated Investments and Allied Electronics, you can compare the effects of market volatilities on Hosken Consolidated and Allied Electronics 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 Hosken Consolidated with a short position of Allied Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hosken Consolidated and Allied Electronics.
Diversification Opportunities for Hosken Consolidated and Allied Electronics
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hosken and Allied is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hosken Consolidated Investment and Allied Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Electronics and Hosken Consolidated 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 Hosken Consolidated Investments are associated (or correlated) with Allied Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Electronics has no effect on the direction of Hosken Consolidated i.e., Hosken Consolidated and Allied Electronics go up and down completely randomly.
Pair Corralation between Hosken Consolidated and Allied Electronics
Assuming the 90 days trading horizon Hosken Consolidated is expected to generate 5.73 times less return on investment than Allied Electronics. But when comparing it to its historical volatility, Hosken Consolidated Investments is 1.54 times less risky than Allied Electronics. It trades about 0.02 of its potential returns per unit of risk. Allied Electronics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 92,375 in Allied Electronics on September 2, 2024 and sell it today you would earn a total of 109,625 from holding Allied Electronics or generate 118.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hosken Consolidated Investment vs. Allied Electronics
Performance |
| Timeline |
| Hosken Consolidated |
| Allied Electronics |
Hosken Consolidated and Allied Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hosken Consolidated and Allied Electronics
The main advantage of trading using opposite Hosken Consolidated and Allied Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hosken Consolidated position performs unexpectedly, Allied Electronics 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 Allied Electronics will offset losses from the drop in Allied Electronics' long position.| Hosken Consolidated vs. Deneb Investments | Hosken Consolidated vs. Centaur Bci Balanced | Hosken Consolidated vs. Sabvest Capital | Hosken Consolidated vs. AfricaRhodium ETF |
| Allied Electronics vs. Centaur Bci Balanced | Allied Electronics vs. Sabvest Capital | Allied Electronics vs. AfricaRhodium ETF | Allied Electronics vs. Indexco Limited |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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