Correlation Between Hoya Corp and Nephros
Can any of the company-specific risk be diversified away by investing in both Hoya Corp and Nephros 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 Nephros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoya Corp and Nephros, you can compare the effects of market volatilities on Hoya Corp and Nephros 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 Nephros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoya Corp and Nephros.
Diversification Opportunities for Hoya Corp and Nephros
Modest diversification
The 3 months correlation between Hoya and Nephros is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hoya Corp and Nephros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nephros 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 Nephros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nephros has no effect on the direction of Hoya Corp i.e., Hoya Corp and Nephros go up and down completely randomly.
Pair Corralation between Hoya Corp and Nephros
Assuming the 90 days horizon Hoya Corp is expected to under-perform the Nephros. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hoya Corp is 1.35 times less risky than Nephros. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Nephros is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 143.00 in Nephros on August 31, 2024 and sell it today you would earn a total of 8.00 from holding Nephros or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoya Corp vs. Nephros
Performance |
| Timeline |
| Hoya Corp |
| Nephros |
Hoya Corp and Nephros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoya Corp and Nephros
The main advantage of trading using opposite Hoya Corp and Nephros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoya Corp position performs unexpectedly, Nephros 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 Nephros will offset losses from the drop in Nephros' long position.| Hoya Corp vs. Sysmex Corp | Hoya Corp vs. Straumann Holding AG | Hoya Corp vs. Coloplast AS | Hoya Corp vs. Essilor International SA |
| Nephros vs. Precision Optics, | Nephros vs. Repro Med Systems | Nephros vs. InfuSystems Holdings | Nephros vs. Utah Medical Products |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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