Correlation Between Houlihan Lokey and Scully Royalty
Can any of the company-specific risk be diversified away by investing in both Houlihan Lokey and Scully Royalty 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 Houlihan Lokey and Scully Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Houlihan Lokey and Scully Royalty, you can compare the effects of market volatilities on Houlihan Lokey and Scully Royalty 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 Houlihan Lokey with a short position of Scully Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Houlihan Lokey and Scully Royalty.
Diversification Opportunities for Houlihan Lokey and Scully Royalty
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Houlihan and Scully is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Houlihan Lokey and Scully Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scully Royalty and Houlihan Lokey 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 Houlihan Lokey are associated (or correlated) with Scully Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scully Royalty has no effect on the direction of Houlihan Lokey i.e., Houlihan Lokey and Scully Royalty go up and down completely randomly.
Pair Corralation between Houlihan Lokey and Scully Royalty
Considering the 90-day investment horizon Houlihan Lokey is expected to generate 0.42 times more return on investment than Scully Royalty. However, Houlihan Lokey is 2.37 times less risky than Scully Royalty. It trades about 0.11 of its potential returns per unit of risk. Scully Royalty is currently generating about 0.01 per unit of risk. If you would invest 9,088 in Houlihan Lokey on August 29, 2024 and sell it today you would earn a total of 9,916 from holding Houlihan Lokey or generate 109.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Houlihan Lokey vs. Scully Royalty
Performance |
| Timeline |
| Houlihan Lokey |
| Scully Royalty |
Houlihan Lokey and Scully Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Houlihan Lokey and Scully Royalty
The main advantage of trading using opposite Houlihan Lokey and Scully Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Houlihan Lokey position performs unexpectedly, Scully Royalty 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 Scully Royalty will offset losses from the drop in Scully Royalty's long position.| Houlihan Lokey vs. Visa Class A | Houlihan Lokey vs. Diamond Hill Investment | Houlihan Lokey vs. Distoken Acquisition | Houlihan Lokey vs. AllianceBernstein Holding LP |
| Scully Royalty vs. Visa Class A | Scully Royalty vs. Diamond Hill Investment | Scully Royalty vs. Distoken Acquisition | Scully Royalty vs. AllianceBernstein Holding LP |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |