Correlation Between Hoya Corp and ConvaTec Group
Can any of the company-specific risk be diversified away by investing in both Hoya Corp and ConvaTec Group 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 ConvaTec Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoya Corp and ConvaTec Group Plc, you can compare the effects of market volatilities on Hoya Corp and ConvaTec Group 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 ConvaTec Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoya Corp and ConvaTec Group.
Diversification Opportunities for Hoya Corp and ConvaTec Group
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hoya and ConvaTec is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hoya Corp and ConvaTec Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConvaTec Group Plc 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 ConvaTec Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConvaTec Group Plc has no effect on the direction of Hoya Corp i.e., Hoya Corp and ConvaTec Group go up and down completely randomly.
Pair Corralation between Hoya Corp and ConvaTec Group
Assuming the 90 days horizon Hoya Corp is expected to under-perform the ConvaTec Group. In addition to that, Hoya Corp is 2.24 times more volatile than ConvaTec Group Plc. It trades about -0.29 of its total potential returns per unit of risk. ConvaTec Group Plc is currently generating about 0.29 per unit of volatility. If you would invest 289.00 in ConvaTec Group Plc on December 1, 2024 and sell it today you would earn a total of 19.00 from holding ConvaTec Group Plc or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoya Corp vs. ConvaTec Group Plc
Performance |
| Timeline |
| Hoya Corp |
| ConvaTec Group Plc |
Hoya Corp and ConvaTec Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoya Corp and ConvaTec Group
The main advantage of trading using opposite Hoya Corp and ConvaTec Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoya Corp position performs unexpectedly, ConvaTec Group 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 ConvaTec Group will offset losses from the drop in ConvaTec Group's long position.| Hoya Corp vs. Sysmex Corp | Hoya Corp vs. Straumann Holding AG | Hoya Corp vs. Coloplast AS | Hoya Corp vs. Essilor International SA |
| ConvaTec Group vs. JE Cleantech Holdings | ConvaTec Group vs. Volaris | ConvaTec Group vs. Ultra Clean Holdings | ConvaTec Group vs. Pintec Technology 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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