Correlation Between HP and Nogin
Can any of the company-specific risk be diversified away by investing in both HP and Nogin 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 HP and Nogin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and Nogin Inc, you can compare the effects of market volatilities on HP and Nogin 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 HP with a short position of Nogin. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Nogin.
Diversification Opportunities for HP and Nogin
Excellent diversification
The 3 months correlation between HP and Nogin is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Nogin Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nogin Inc and HP 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 HP Inc are associated (or correlated) with Nogin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nogin Inc has no effect on the direction of HP i.e., HP and Nogin go up and down completely randomly.
Pair Corralation between HP and Nogin
Considering the 90-day investment horizon HP Inc is expected to generate 0.12 times more return on investment than Nogin. However, HP Inc is 8.59 times less risky than Nogin. It trades about 0.04 of its potential returns per unit of risk. Nogin Inc is currently generating about -0.05 per unit of risk. If you would invest 2,706 in HP Inc on September 2, 2024 and sell it today you would earn a total of 837.00 from holding HP Inc or generate 30.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.05% |
| Values | Daily Returns |
HP Inc vs. Nogin Inc
Performance |
| Timeline |
| HP Inc |
| Nogin Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
HP and Nogin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and Nogin
The main advantage of trading using opposite HP and Nogin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, Nogin 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 Nogin will offset losses from the drop in Nogin's long position.The idea behind HP Inc and Nogin Inc 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.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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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