Correlation Between Hawaiian Electric and Jeffs Brands
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric and Jeffs Brands 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 Jeffs Brands 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 Jeffs Brands, you can compare the effects of market volatilities on Hawaiian Electric and Jeffs Brands 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 Jeffs Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and Jeffs Brands.
Diversification Opportunities for Hawaiian Electric and Jeffs Brands
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hawaiian and Jeffs is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and Jeffs Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffs Brands 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 Jeffs Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffs Brands has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and Jeffs Brands go up and down completely randomly.
Pair Corralation between Hawaiian Electric and Jeffs Brands
Allowing for the 90-day total investment horizon Hawaiian Electric Industries is expected to generate 0.66 times more return on investment than Jeffs Brands. However, Hawaiian Electric Industries is 1.52 times less risky than Jeffs Brands. It trades about 0.2 of its potential returns per unit of risk. Jeffs Brands is currently generating about -0.34 per unit of risk. If you would invest 1,008 in Hawaiian Electric Industries on December 10, 2024 and sell it today you would earn a total of 138.00 from holding Hawaiian Electric Industries or generate 13.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. Jeffs Brands
Performance |
| Timeline |
| Hawaiian Electric |
| Jeffs Brands |
Hawaiian Electric and Jeffs Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and Jeffs Brands
The main advantage of trading using opposite Hawaiian Electric and Jeffs Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric position performs unexpectedly, Jeffs Brands 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 Jeffs Brands will offset losses from the drop in Jeffs Brands' 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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