Correlation Between Hoya Corp and ATRION
Can any of the company-specific risk be diversified away by investing in both Hoya Corp and ATRION 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 Hoya Corp and ATRION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoya Corp and ATRION, you can compare the effects of market volatilities on Hoya Corp and ATRION 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 Hoya Corp with a short position of ATRION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoya Corp and ATRION.
Diversification Opportunities for Hoya Corp and ATRION
Good diversification
The 3 months correlation between Hoya and ATRION is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hoya Corp and ATRION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRION and Hoya Corp 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 Hoya Corp are associated (or correlated) with ATRION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRION has no effect on the direction of Hoya Corp i.e., Hoya Corp and ATRION go up and down completely randomly.
Pair Corralation between Hoya Corp and ATRION
Assuming the 90 days horizon Hoya Corp is expected to generate 0.16 times more return on investment than ATRION. However, Hoya Corp is 6.13 times less risky than ATRION. It trades about 0.04 of its potential returns per unit of risk. ATRION is currently generating about -0.13 per unit of risk. If you would invest 11,656 in Hoya Corp on August 24, 2024 and sell it today you would earn a total of 1,015 from holding Hoya Corp or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 48.0% |
| Values | Daily Returns |
Hoya Corp vs. ATRION
Performance |
| Timeline |
| Hoya Corp |
| ATRION |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hoya Corp and ATRION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoya Corp and ATRION
The main advantage of trading using opposite Hoya Corp and ATRION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoya Corp position performs unexpectedly, ATRION 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 ATRION will offset losses from the drop in ATRION's long position.| Hoya Corp vs. BioLife Sciences | Hoya Corp vs. GlucoTrack | Hoya Corp vs. Sharps Technology | Hoya Corp vs. Wearable Health Solutions |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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