Correlation Between Hurco Companies and Beauty Health
Can any of the company-specific risk be diversified away by investing in both Hurco Companies and Beauty Health 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 Hurco Companies and Beauty Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurco Companies and Beauty Health Co, you can compare the effects of market volatilities on Hurco Companies and Beauty Health 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 Hurco Companies with a short position of Beauty Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurco Companies and Beauty Health.
Diversification Opportunities for Hurco Companies and Beauty Health
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hurco and Beauty is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and Beauty Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beauty Health and Hurco Companies 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 Hurco Companies are associated (or correlated) with Beauty Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beauty Health has no effect on the direction of Hurco Companies i.e., Hurco Companies and Beauty Health go up and down completely randomly.
Pair Corralation between Hurco Companies and Beauty Health
Given the investment horizon of 90 days Hurco Companies is expected to generate 0.62 times more return on investment than Beauty Health. However, Hurco Companies is 1.62 times less risky than Beauty Health. It trades about -0.17 of its potential returns per unit of risk. Beauty Health Co is currently generating about -0.19 per unit of risk. If you would invest 2,180 in Hurco Companies on September 14, 2024 and sell it today you would lose (218.00) from holding Hurco Companies or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurco Companies vs. Beauty Health Co
Performance |
| Timeline |
| Hurco Companies |
| Beauty Health |
Hurco Companies and Beauty Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurco Companies and Beauty Health
The main advantage of trading using opposite Hurco Companies and Beauty Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies position performs unexpectedly, Beauty Health 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 Beauty Health will offset losses from the drop in Beauty Health's long position.| Hurco Companies vs. Enerpac Tool Group | Hurco Companies vs. China Yuchai International | Hurco Companies vs. Luxfer Holdings PLC | Hurco Companies vs. Omega Flex |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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