Correlation Between Honeywell International and Disney
Can any of the company-specific risk be diversified away by investing in both Honeywell International and Disney 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 Honeywell International and Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Honeywell International and The Walt Disney, you can compare the effects of market volatilities on Honeywell International and Disney 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 Honeywell International with a short position of Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honeywell International and Disney.
Diversification Opportunities for Honeywell International and Disney
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Honeywell and Disney is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Honeywell International and The Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and Honeywell International 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 Honeywell International are associated (or correlated) with Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Honeywell International i.e., Honeywell International and Disney go up and down completely randomly.
Pair Corralation between Honeywell International and Disney
Assuming the 90 days trading horizon Honeywell International is expected to generate 0.81 times more return on investment than Disney. However, Honeywell International is 1.23 times less risky than Disney. It trades about 0.04 of its potential returns per unit of risk. The Walt Disney is currently generating about 0.03 per unit of risk. If you would invest 334,794 in Honeywell International on December 6, 2024 and sell it today you would earn a total of 93,594 from holding Honeywell International or generate 27.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Honeywell International vs. The Walt Disney
Performance |
| Timeline |
| Honeywell International |
| Walt Disney |
Honeywell International and Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Honeywell International and Disney
The main advantage of trading using opposite Honeywell International and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Honeywell International position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney's long position.| Honeywell International vs. KB Home | Honeywell International vs. Steel Dynamics | Honeywell International vs. Grupo Sports World | Honeywell International vs. First Republic Bank |
| Disney vs. Hoteles City Express | Disney vs. McEwen Mining | Disney vs. The Bank of | Disney vs. Micron Technology |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |