Correlation Between Hillcrest Energy and Scotch Creek
Can any of the company-specific risk be diversified away by investing in both Hillcrest Energy and Scotch Creek 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 Hillcrest Energy and Scotch Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hillcrest Energy Technologies and Scotch Creek Ventures, you can compare the effects of market volatilities on Hillcrest Energy and Scotch Creek 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 Hillcrest Energy with a short position of Scotch Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillcrest Energy and Scotch Creek.
Diversification Opportunities for Hillcrest Energy and Scotch Creek
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hillcrest and Scotch is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hillcrest Energy Technologies and Scotch Creek Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scotch Creek Ventures and Hillcrest Energy 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 Hillcrest Energy Technologies are associated (or correlated) with Scotch Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scotch Creek Ventures has no effect on the direction of Hillcrest Energy i.e., Hillcrest Energy and Scotch Creek go up and down completely randomly.
Pair Corralation between Hillcrest Energy and Scotch Creek
Assuming the 90 days horizon Hillcrest Energy Technologies is expected to under-perform the Scotch Creek. But the otc stock apears to be less risky and, when comparing its historical volatility, Hillcrest Energy Technologies is 1.95 times less risky than Scotch Creek. The otc stock trades about -0.02 of its potential returns per unit of risk. The Scotch Creek Ventures is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Scotch Creek Ventures on November 19, 2024 and sell it today you would lose (63.60) from holding Scotch Creek Ventures or give up 93.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.19% |
| Values | Daily Returns |
Hillcrest Energy Technologies vs. Scotch Creek Ventures
Performance |
| Timeline |
| Hillcrest Energy Tec |
| Scotch Creek Ventures |
Hillcrest Energy and Scotch Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hillcrest Energy and Scotch Creek
The main advantage of trading using opposite Hillcrest Energy and Scotch Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillcrest Energy position performs unexpectedly, Scotch Creek 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 Scotch Creek will offset losses from the drop in Scotch Creek's long position.| Hillcrest Energy vs. Deswell Industries | Hillcrest Energy vs. Ostin Technology Group | Hillcrest Energy vs. Interlink Electronics | Hillcrest Energy vs. SigmaTron International |
| Scotch Creek vs. Alpha Copper Corp | Scotch Creek vs. American Rare Earths | Scotch Creek vs. Placer Creek Mining | Scotch Creek vs. Ameriwest Lithium |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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