Correlation Between HWH International and Solo Brands
Can any of the company-specific risk be diversified away by investing in both HWH International and Solo Brands 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 HWH International and Solo Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HWH International and Solo Brands, you can compare the effects of market volatilities on HWH International and Solo Brands 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 HWH International with a short position of Solo Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of HWH International and Solo Brands.
Diversification Opportunities for HWH International and Solo Brands
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HWH and Solo is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding HWH International and Solo Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solo Brands and HWH 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 HWH International are associated (or correlated) with Solo Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solo Brands has no effect on the direction of HWH International i.e., HWH International and Solo Brands go up and down completely randomly.
Pair Corralation between HWH International and Solo Brands
Considering the 90-day investment horizon HWH International is expected to under-perform the Solo Brands. In addition to that, HWH International is 1.81 times more volatile than Solo Brands. It trades about -0.02 of its total potential returns per unit of risk. Solo Brands is currently generating about -0.02 per unit of volatility. If you would invest 428.00 in Solo Brands on August 27, 2024 and sell it today you would lose (301.00) from holding Solo Brands or give up 70.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HWH International vs. Solo Brands
Performance |
| Timeline |
| HWH International |
| Solo Brands |
HWH International and Solo Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HWH International and Solo Brands
The main advantage of trading using opposite HWH International and Solo Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HWH International position performs unexpectedly, Solo Brands 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 Solo Brands will offset losses from the drop in Solo Brands' long position.| HWH International vs. Asbury Automotive Group | HWH International vs. Diageo PLC ADR | HWH International vs. Titan Machinery | HWH International vs. Grocery Outlet Holding |
| Solo Brands vs. Qurate Retail Series | Solo Brands vs. Hour Loop | Solo Brands vs. 1StdibsCom | Solo Brands vs. Baozun Inc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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