Correlation Between Honeywell International and Leone Asset
Can any of the company-specific risk be diversified away by investing in both Honeywell International and Leone Asset 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 Leone Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Honeywell International and Leone Asset Management, you can compare the effects of market volatilities on Honeywell International and Leone Asset 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 Leone Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honeywell International and Leone Asset.
Diversification Opportunities for Honeywell International and Leone Asset
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Honeywell and Leone is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Honeywell International and Leone Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leone Asset Management 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 Leone Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leone Asset Management has no effect on the direction of Honeywell International i.e., Honeywell International and Leone Asset go up and down completely randomly.
Pair Corralation between Honeywell International and Leone Asset
If you would invest 0.10 in Leone Asset Management on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Leone Asset Management or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Honeywell International vs. Leone Asset Management
Performance |
| Timeline |
| Honeywell International |
| Leone Asset Management |
Honeywell International and Leone Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Honeywell International and Leone Asset
The main advantage of trading using opposite Honeywell International and Leone Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Honeywell International position performs unexpectedly, Leone Asset 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 Leone Asset will offset losses from the drop in Leone Asset's long position.The idea behind Honeywell International and Leone Asset Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Leone Asset vs. Honeywell International | Leone Asset vs. MDU Resources Group | Leone Asset vs. Compass Diversified Holdings | Leone Asset vs. Valmont Industries |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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