Correlation Between Huabao International and HEXPOL AB
Can any of the company-specific risk be diversified away by investing in both Huabao International and HEXPOL AB 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 Huabao International and HEXPOL AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huabao International Holdings and HEXPOL AB, you can compare the effects of market volatilities on Huabao International and HEXPOL AB 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 Huabao International with a short position of HEXPOL AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huabao International and HEXPOL AB.
Diversification Opportunities for Huabao International and HEXPOL AB
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Huabao and HEXPOL is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Huabao International Holdings and HEXPOL AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXPOL AB and Huabao International 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 Huabao International Holdings are associated (or correlated) with HEXPOL AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEXPOL AB has no effect on the direction of Huabao International i.e., Huabao International and HEXPOL AB go up and down completely randomly.
Pair Corralation between Huabao International and HEXPOL AB
If you would invest 26.00 in Huabao International Holdings on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Huabao International Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Huabao International Holdings vs. HEXPOL AB
Performance |
| Timeline |
| Huabao International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HEXPOL AB |
Huabao International and HEXPOL AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huabao International and HEXPOL AB
The main advantage of trading using opposite Huabao International and HEXPOL AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huabao International position performs unexpectedly, HEXPOL AB 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 HEXPOL AB will offset losses from the drop in HEXPOL AB's long position.| Huabao International vs. HEXPOL AB | Huabao International vs. Nitto Denko | Huabao International vs. Sasol | Huabao International vs. Eastman Chemical |
| HEXPOL AB vs. Lanxess AG | HEXPOL AB vs. Incitec Pivot Ltd | HEXPOL AB vs. Fuchs Petrolub SE | HEXPOL AB vs. Croda International PLC |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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