Correlation Between HE Equipment and Multi Ways
Can any of the company-specific risk be diversified away by investing in both HE Equipment and Multi Ways 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 HE Equipment and Multi Ways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and Multi Ways Holdings, you can compare the effects of market volatilities on HE Equipment and Multi Ways 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 HE Equipment with a short position of Multi Ways. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and Multi Ways.
Diversification Opportunities for HE Equipment and Multi Ways
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HEES and Multi is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and Multi Ways Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Ways Holdings and HE Equipment 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 HE Equipment Services are associated (or correlated) with Multi Ways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Ways Holdings has no effect on the direction of HE Equipment i.e., HE Equipment and Multi Ways go up and down completely randomly.
Pair Corralation between HE Equipment and Multi Ways
Given the investment horizon of 90 days HE Equipment Services is expected to generate 0.83 times more return on investment than Multi Ways. However, HE Equipment Services is 1.21 times less risky than Multi Ways. It trades about 0.09 of its potential returns per unit of risk. Multi Ways Holdings is currently generating about -0.14 per unit of risk. If you would invest 5,546 in HE Equipment Services on August 26, 2024 and sell it today you would earn a total of 330.00 from holding HE Equipment Services or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HE Equipment Services vs. Multi Ways Holdings
Performance |
| Timeline |
| HE Equipment Services |
| Multi Ways Holdings |
HE Equipment and Multi Ways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and Multi Ways
The main advantage of trading using opposite HE Equipment and Multi Ways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment position performs unexpectedly, Multi Ways 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 Multi Ways will offset losses from the drop in Multi Ways' long position.| HE Equipment vs. PROG Holdings | HE Equipment vs. McGrath RentCorp | HE Equipment vs. Mega Matrix Corp | HE Equipment vs. FTAI Aviation Ltd |
| Multi Ways vs. FlexShopper | Multi Ways vs. Hertz Global Holdings | Multi Ways vs. Avis Budget Group | Multi Ways vs. PROG Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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