Correlation Between HP and GENERAL
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By analyzing existing cross correlation between HP Inc and GENERAL DYNAMICS P, you can compare the effects of market volatilities on HP and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and GENERAL.
Diversification Opportunities for HP and GENERAL
Excellent diversification
The 3 months correlation between HP and GENERAL is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and GENERAL DYNAMICS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL DYNAMICS P 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL DYNAMICS P has no effect on the direction of HP i.e., HP and GENERAL go up and down completely randomly.
Pair Corralation between HP and GENERAL
Considering the 90-day investment horizon HP Inc is expected to generate 4.18 times more return on investment than GENERAL. However, HP is 4.18 times more volatile than GENERAL DYNAMICS P. It trades about 0.13 of its potential returns per unit of risk. GENERAL DYNAMICS P is currently generating about -0.3 per unit of risk. If you would invest 3,647 in HP Inc on August 25, 2024 and sell it today you would earn a total of 166.00 from holding HP Inc or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
HP Inc vs. GENERAL DYNAMICS P
Performance |
| Timeline |
| HP Inc |
| GENERAL DYNAMICS P |
HP and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and GENERAL
The main advantage of trading using opposite HP and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.The idea behind HP Inc and GENERAL DYNAMICS P 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.| GENERAL vs. Sea | GENERAL vs. Upper Street Marketing | GENERAL vs. Asbury Automotive Group | GENERAL vs. Cedar Realty Trust |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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