Correlation Between Hexcel and Postal Savings
Can any of the company-specific risk be diversified away by investing in both Hexcel and Postal Savings 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 Hexcel and Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hexcel and Postal Savings Bank, you can compare the effects of market volatilities on Hexcel and Postal Savings 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 Hexcel with a short position of Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexcel and Postal Savings.
Diversification Opportunities for Hexcel and Postal Savings
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hexcel and Postal is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hexcel and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank and Hexcel 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 Hexcel are associated (or correlated) with Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Hexcel i.e., Hexcel and Postal Savings go up and down completely randomly.
Pair Corralation between Hexcel and Postal Savings
Assuming the 90 days horizon Hexcel is expected to generate 1.27 times more return on investment than Postal Savings. However, Hexcel is 1.27 times more volatile than Postal Savings Bank. It trades about 0.16 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.08 per unit of risk. If you would invest 5,700 in Hexcel on September 13, 2024 and sell it today you would earn a total of 300.00 from holding Hexcel or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexcel vs. Postal Savings Bank
Performance |
| Timeline |
| Hexcel |
| Postal Savings Bank |
Hexcel and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexcel and Postal Savings
The main advantage of trading using opposite Hexcel and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexcel position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| Hexcel vs. Verizon Communications | Hexcel vs. Iridium Communications | Hexcel vs. CHINA TELECOM H | Hexcel vs. Citic Telecom International |
| Postal Savings vs. POSBO UNSPADRS20YC1 | Postal Savings vs. UTD OV BK LOC ADR1 | Postal Savings vs. Superior Plus Corp | Postal Savings vs. SIVERS SEMICONDUCTORS AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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