Correlation Between Hardide PLC and Chocoladefabriken
Can any of the company-specific risk be diversified away by investing in both Hardide PLC and Chocoladefabriken 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 Hardide PLC and Chocoladefabriken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hardide PLC and Chocoladefabriken Lindt Spruengli, you can compare the effects of market volatilities on Hardide PLC and Chocoladefabriken 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 Hardide PLC with a short position of Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hardide PLC and Chocoladefabriken.
Diversification Opportunities for Hardide PLC and Chocoladefabriken
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hardide and Chocoladefabriken is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hardide PLC and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt and Hardide PLC 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 Hardide PLC are associated (or correlated) with Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Hardide PLC i.e., Hardide PLC and Chocoladefabriken go up and down completely randomly.
Pair Corralation between Hardide PLC and Chocoladefabriken
Assuming the 90 days trading horizon Hardide PLC is expected to generate 2.8 times more return on investment than Chocoladefabriken. However, Hardide PLC is 2.8 times more volatile than Chocoladefabriken Lindt Spruengli. It trades about 0.12 of its potential returns per unit of risk. Chocoladefabriken Lindt Spruengli is currently generating about -0.13 per unit of risk. If you would invest 455.00 in Hardide PLC on August 30, 2024 and sell it today you would earn a total of 30.00 from holding Hardide PLC or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hardide PLC vs. Chocoladefabriken Lindt Spruen
Performance |
| Timeline |
| Hardide PLC |
| Chocoladefabriken Lindt |
Hardide PLC and Chocoladefabriken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hardide PLC and Chocoladefabriken
The main advantage of trading using opposite Hardide PLC and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hardide PLC position performs unexpectedly, Chocoladefabriken 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 Chocoladefabriken will offset losses from the drop in Chocoladefabriken's long position.| Hardide PLC vs. Gamma Communications PLC | Hardide PLC vs. MTI Wireless Edge | Hardide PLC vs. Cairn Homes PLC | Hardide PLC vs. X FAB Silicon Foundries |
| Chocoladefabriken vs. Tungsten West PLC | Chocoladefabriken vs. Argo Group Limited | Chocoladefabriken vs. Hardide PLC | Chocoladefabriken vs. Versarien PLC |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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