Correlation Between HomeToGo and Stanley Electric
Can any of the company-specific risk be diversified away by investing in both HomeToGo and Stanley Electric 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 HomeToGo and Stanley Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeToGo SE and Stanley Electric Co, you can compare the effects of market volatilities on HomeToGo and Stanley Electric 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 HomeToGo with a short position of Stanley Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and Stanley Electric.
Diversification Opportunities for HomeToGo and Stanley Electric
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HomeToGo and Stanley is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and Stanley Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Electric and HomeToGo 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 HomeToGo SE are associated (or correlated) with Stanley Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Electric has no effect on the direction of HomeToGo i.e., HomeToGo and Stanley Electric go up and down completely randomly.
Pair Corralation between HomeToGo and Stanley Electric
Assuming the 90 days trading horizon HomeToGo SE is expected to under-perform the Stanley Electric. In addition to that, HomeToGo is 2.68 times more volatile than Stanley Electric Co. It trades about -0.05 of its total potential returns per unit of risk. Stanley Electric Co is currently generating about 0.0 per unit of volatility. If you would invest 1,540 in Stanley Electric Co on October 15, 2024 and sell it today you would earn a total of 0.00 from holding Stanley Electric Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HomeToGo SE vs. Stanley Electric Co
Performance |
| Timeline |
| HomeToGo SE |
| Stanley Electric |
HomeToGo and Stanley Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeToGo and Stanley Electric
The main advantage of trading using opposite HomeToGo and Stanley Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo position performs unexpectedly, Stanley Electric 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 Stanley Electric will offset losses from the drop in Stanley Electric's long position.| HomeToGo vs. CanSino Biologics | HomeToGo vs. MCEWEN MINING INC | HomeToGo vs. Jacquet Metal Service | HomeToGo vs. Rayonier Advanced Materials |
| Stanley Electric vs. ENVVENO MEDICAL DL 00001 | Stanley Electric vs. MeVis Medical Solutions | Stanley Electric vs. Diamyd Medical AB | Stanley Electric vs. CREO MEDICAL GRP |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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