Correlation Between Hydrofarm Holdings and AppHarvest
Can any of the company-specific risk be diversified away by investing in both Hydrofarm Holdings and AppHarvest 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 Hydrofarm Holdings and AppHarvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hydrofarm Holdings Group and AppHarvest, you can compare the effects of market volatilities on Hydrofarm Holdings and AppHarvest 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 Hydrofarm Holdings with a short position of AppHarvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydrofarm Holdings and AppHarvest.
Diversification Opportunities for Hydrofarm Holdings and AppHarvest
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hydrofarm and AppHarvest is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hydrofarm Holdings Group and AppHarvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AppHarvest and Hydrofarm Holdings 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 Hydrofarm Holdings Group are associated (or correlated) with AppHarvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AppHarvest has no effect on the direction of Hydrofarm Holdings i.e., Hydrofarm Holdings and AppHarvest go up and down completely randomly.
Pair Corralation between Hydrofarm Holdings and AppHarvest
If you would invest 61.00 in Hydrofarm Holdings Group on October 26, 2024 and sell it today you would earn a total of 3.00 from holding Hydrofarm Holdings Group or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
Hydrofarm Holdings Group vs. AppHarvest
Performance |
| Timeline |
| Hydrofarm Holdings |
| AppHarvest |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hydrofarm Holdings and AppHarvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydrofarm Holdings and AppHarvest
The main advantage of trading using opposite Hydrofarm Holdings and AppHarvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydrofarm Holdings position performs unexpectedly, AppHarvest 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 AppHarvest will offset losses from the drop in AppHarvest's long position.| Hydrofarm Holdings vs. Gencor Industries | Hydrofarm Holdings vs. CEA Industries | Hydrofarm Holdings vs. Arts Way Manufacturing Co | Hydrofarm Holdings vs. CubicFarm Systems Corp |
| AppHarvest vs. Porch Group | AppHarvest vs. Hydrofarm Holdings Group | AppHarvest vs. Danimer Scientific | AppHarvest vs. Open Lending Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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