Correlation Between Harrow Health and Babcock Wilcox
Can any of the company-specific risk be diversified away by investing in both Harrow Health and Babcock Wilcox 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 Harrow Health and Babcock Wilcox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harrow Health 8625 and Babcock Wilcox Enterprises, you can compare the effects of market volatilities on Harrow Health and Babcock Wilcox 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 Harrow Health with a short position of Babcock Wilcox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harrow Health and Babcock Wilcox.
Diversification Opportunities for Harrow Health and Babcock Wilcox
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harrow and Babcock is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Harrow Health 8625 and Babcock Wilcox Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Babcock Wilcox Enter and Harrow Health 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 Harrow Health 8625 are associated (or correlated) with Babcock Wilcox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Babcock Wilcox Enter has no effect on the direction of Harrow Health i.e., Harrow Health and Babcock Wilcox go up and down completely randomly.
Pair Corralation between Harrow Health and Babcock Wilcox
Assuming the 90 days horizon Harrow Health 8625 is expected to generate 0.21 times more return on investment than Babcock Wilcox. However, Harrow Health 8625 is 4.78 times less risky than Babcock Wilcox. It trades about 0.1 of its potential returns per unit of risk. Babcock Wilcox Enterprises is currently generating about -0.09 per unit of risk. If you would invest 2,468 in Harrow Health 8625 on October 26, 2024 and sell it today you would earn a total of 49.00 from holding Harrow Health 8625 or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harrow Health 8625 vs. Babcock Wilcox Enterprises
Performance |
| Timeline |
| Harrow Health 8625 |
| Babcock Wilcox Enter |
Harrow Health and Babcock Wilcox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harrow Health and Babcock Wilcox
The main advantage of trading using opposite Harrow Health and Babcock Wilcox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harrow Health position performs unexpectedly, Babcock Wilcox 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 Babcock Wilcox will offset losses from the drop in Babcock Wilcox's long position.| Harrow Health vs. Babcock Wilcox Enterprises, | Harrow Health vs. Babcock Wilcox Enterprises | Harrow Health vs. B Riley Financial | Harrow Health vs. SiriusPoint |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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