Correlation Between Hawaiian Electric and Apex Biotechnology
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric and Apex Biotechnology 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 Hawaiian Electric and Apex Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Electric Industries and Apex Biotechnology Corp, you can compare the effects of market volatilities on Hawaiian Electric and Apex Biotechnology 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 Hawaiian Electric with a short position of Apex Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and Apex Biotechnology.
Diversification Opportunities for Hawaiian Electric and Apex Biotechnology
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hawaiian and Apex is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and Apex Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Biotechnology Corp and Hawaiian Electric 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 Hawaiian Electric Industries are associated (or correlated) with Apex Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Biotechnology Corp has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and Apex Biotechnology go up and down completely randomly.
Pair Corralation between Hawaiian Electric and Apex Biotechnology
Allowing for the 90-day total investment horizon Hawaiian Electric Industries is expected to generate 2.67 times more return on investment than Apex Biotechnology. However, Hawaiian Electric is 2.67 times more volatile than Apex Biotechnology Corp. It trades about 0.01 of its potential returns per unit of risk. Apex Biotechnology Corp is currently generating about -0.01 per unit of risk. If you would invest 1,322 in Hawaiian Electric Industries on December 11, 2024 and sell it today you would lose (197.00) from holding Hawaiian Electric Industries or give up 14.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.5% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. Apex Biotechnology Corp
Performance |
| Timeline |
| Hawaiian Electric |
| Apex Biotechnology Corp |
Hawaiian Electric and Apex Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and Apex Biotechnology
The main advantage of trading using opposite Hawaiian Electric and Apex Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric position performs unexpectedly, Apex Biotechnology 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 Apex Biotechnology will offset losses from the drop in Apex Biotechnology's long position.| Hawaiian Electric vs. DTE Energy | ||
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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