Correlation Between Hexcel and GREENLIGHT CAP
Can any of the company-specific risk be diversified away by investing in both Hexcel and GREENLIGHT CAP 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 GREENLIGHT CAP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hexcel and GREENLIGHT CAP RE, you can compare the effects of market volatilities on Hexcel and GREENLIGHT CAP 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 GREENLIGHT CAP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexcel and GREENLIGHT CAP.
Diversification Opportunities for Hexcel and GREENLIGHT CAP
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hexcel and GREENLIGHT is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hexcel and GREENLIGHT CAP RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENLIGHT CAP RE 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 GREENLIGHT CAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENLIGHT CAP RE has no effect on the direction of Hexcel i.e., Hexcel and GREENLIGHT CAP go up and down completely randomly.
Pair Corralation between Hexcel and GREENLIGHT CAP
Assuming the 90 days horizon Hexcel is expected to generate 10.48 times less return on investment than GREENLIGHT CAP. In addition to that, Hexcel is 1.03 times more volatile than GREENLIGHT CAP RE. It trades about 0.01 of its total potential returns per unit of risk. GREENLIGHT CAP RE is currently generating about 0.07 per unit of volatility. If you would invest 1,120 in GREENLIGHT CAP RE on September 24, 2024 and sell it today you would earn a total of 210.00 from holding GREENLIGHT CAP RE or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexcel vs. GREENLIGHT CAP RE
Performance |
| Timeline |
| Hexcel |
| GREENLIGHT CAP RE |
Hexcel and GREENLIGHT CAP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexcel and GREENLIGHT CAP
The main advantage of trading using opposite Hexcel and GREENLIGHT CAP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexcel position performs unexpectedly, GREENLIGHT CAP 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 GREENLIGHT CAP will offset losses from the drop in GREENLIGHT CAP's long position.| Hexcel vs. Raytheon Technologies Corp | Hexcel vs. The Boeing | Hexcel vs. Lockheed Martin | Hexcel vs. The Boeing |
| GREENLIGHT CAP vs. COFCO Joycome Foods | GREENLIGHT CAP vs. Tower One Wireless | GREENLIGHT CAP vs. Ebro Foods SA | GREENLIGHT CAP vs. Astral Foods Limited |
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 CEOs Directory module to screen CEOs from public companies around the world.
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