Correlation Between H2O Retailing and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both H2O Retailing and Commercial Vehicle 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 H2O Retailing and Commercial Vehicle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H2O Retailing and Commercial Vehicle Group, you can compare the effects of market volatilities on H2O Retailing and Commercial Vehicle 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 H2O Retailing with a short position of Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and Commercial Vehicle.
Diversification Opportunities for H2O Retailing and Commercial Vehicle
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between H2O and Commercial is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle and H2O Retailing 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 H2O Retailing are associated (or correlated) with Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of H2O Retailing i.e., H2O Retailing and Commercial Vehicle go up and down completely randomly.
Pair Corralation between H2O Retailing and Commercial Vehicle
Assuming the 90 days horizon H2O Retailing is expected to generate 0.91 times more return on investment than Commercial Vehicle. However, H2O Retailing is 1.1 times less risky than Commercial Vehicle. It trades about 0.07 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.06 per unit of risk. If you would invest 645.00 in H2O Retailing on October 16, 2024 and sell it today you would earn a total of 705.00 from holding H2O Retailing or generate 109.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
H2O Retailing vs. Commercial Vehicle Group
Performance |
| Timeline |
| H2O Retailing |
| Commercial Vehicle |
H2O Retailing and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H2O Retailing and Commercial Vehicle
The main advantage of trading using opposite H2O Retailing and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| H2O Retailing vs. Vishay Intertechnology | H2O Retailing vs. EEDUCATION ALBERT AB | H2O Retailing vs. Casio Computer CoLtd | H2O Retailing vs. Strategic Education |
| Commercial Vehicle vs. TRADEDOUBLER AB SK | Commercial Vehicle vs. Tradeweb Markets | Commercial Vehicle vs. H2O Retailing | Commercial Vehicle vs. TRADELINK ELECTRON |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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