Correlation Between Hewlett Packard and Eternit SA
Can any of the company-specific risk be diversified away by investing in both Hewlett Packard and Eternit SA 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 Hewlett Packard and Eternit SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hewlett Packard Co and Eternit SA, you can compare the effects of market volatilities on Hewlett Packard and Eternit SA 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 Hewlett Packard with a short position of Eternit SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hewlett Packard and Eternit SA.
Diversification Opportunities for Hewlett Packard and Eternit SA
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hewlett and Eternit is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hewlett Packard Co and Eternit SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eternit SA and Hewlett Packard 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 Hewlett Packard Co are associated (or correlated) with Eternit SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eternit SA has no effect on the direction of Hewlett Packard i.e., Hewlett Packard and Eternit SA go up and down completely randomly.
Pair Corralation between Hewlett Packard and Eternit SA
Assuming the 90 days trading horizon Hewlett Packard is expected to generate 61.89 times less return on investment than Eternit SA. But when comparing it to its historical volatility, Hewlett Packard Co is 1.74 times less risky than Eternit SA. It trades about 0.0 of its potential returns per unit of risk. Eternit SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 514.00 in Eternit SA on August 31, 2024 and sell it today you would earn a total of 62.00 from holding Eternit SA or generate 12.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hewlett Packard Co vs. Eternit SA
Performance |
| Timeline |
| Hewlett Packard |
| Eternit SA |
Hewlett Packard and Eternit SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hewlett Packard and Eternit SA
The main advantage of trading using opposite Hewlett Packard and Eternit SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hewlett Packard position performs unexpectedly, Eternit SA 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 Eternit SA will offset losses from the drop in Eternit SA's long position.| Hewlett Packard vs. Metalurgica Gerdau SA | Hewlett Packard vs. METISA Metalrgica Timboense | Hewlett Packard vs. Deutsche Bank Aktiengesellschaft | Hewlett Packard vs. HDFC Bank Limited |
| Eternit SA vs. BrasilAgro Companhia | Eternit SA vs. Indstrias Romi SA | Eternit SA vs. JHSF Participaes SA | Eternit SA vs. Energisa SA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |