Correlation Between HP and STORE Capital
Can any of the company-specific risk be diversified away by investing in both HP and STORE Capital 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 STORE Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and STORE Capital Corp, you can compare the effects of market volatilities on HP and STORE Capital 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 STORE Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and STORE Capital.
Diversification Opportunities for HP and STORE Capital
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HP and STORE is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and STORE Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE Capital Corp 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 STORE Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE Capital Corp has no effect on the direction of HP i.e., HP and STORE Capital go up and down completely randomly.
Pair Corralation between HP and STORE Capital
If you would invest 3,476 in HP Inc on August 30, 2024 and sell it today you would lose (10.00) from holding HP Inc or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
HP Inc vs. STORE Capital Corp
Performance |
| Timeline |
| HP Inc |
| STORE Capital Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
HP and STORE Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and STORE Capital
The main advantage of trading using opposite HP and STORE Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, STORE Capital 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 STORE Capital will offset losses from the drop in STORE Capital's long position.The idea behind HP Inc and STORE Capital Corp 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.| STORE Capital vs. ScanSource | STORE Capital vs. Jabil Circuit | STORE Capital vs. Sphere Entertainment Co | STORE Capital vs. NETGEAR |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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