Correlation Between Hexcel and PENINSULA ENERG
Can any of the company-specific risk be diversified away by investing in both Hexcel and PENINSULA ENERG 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 PENINSULA ENERG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hexcel and PENINSULA ENERG, you can compare the effects of market volatilities on Hexcel and PENINSULA ENERG 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 PENINSULA ENERG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexcel and PENINSULA ENERG.
Diversification Opportunities for Hexcel and PENINSULA ENERG
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hexcel and PENINSULA is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hexcel and PENINSULA ENERG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENINSULA ENERG 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 PENINSULA ENERG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENINSULA ENERG has no effect on the direction of Hexcel i.e., Hexcel and PENINSULA ENERG go up and down completely randomly.
Pair Corralation between Hexcel and PENINSULA ENERG
Assuming the 90 days horizon Hexcel is expected to generate 0.34 times more return on investment than PENINSULA ENERG. However, Hexcel is 2.95 times less risky than PENINSULA ENERG. It trades about 0.06 of its potential returns per unit of risk. PENINSULA ENERG is currently generating about 0.01 per unit of risk. If you would invest 5,850 in Hexcel on September 25, 2024 and sell it today you would earn a total of 100.00 from holding Hexcel or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexcel vs. PENINSULA ENERG
Performance |
| Timeline |
| Hexcel |
| PENINSULA ENERG |
Hexcel and PENINSULA ENERG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexcel and PENINSULA ENERG
The main advantage of trading using opposite Hexcel and PENINSULA ENERG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexcel position performs unexpectedly, PENINSULA ENERG 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 PENINSULA ENERG will offset losses from the drop in PENINSULA ENERG's long position.| Hexcel vs. Raytheon Technologies Corp | Hexcel vs. The Boeing | Hexcel vs. Lockheed Martin | Hexcel vs. The Boeing |
| PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Microsoft | PENINSULA ENERG vs. Microsoft |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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