Correlation Between Hydrofarm Holdings and DermTech
Can any of the company-specific risk be diversified away by investing in both Hydrofarm Holdings and DermTech 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 DermTech 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 DermTech, you can compare the effects of market volatilities on Hydrofarm Holdings and DermTech 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 DermTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydrofarm Holdings and DermTech.
Diversification Opportunities for Hydrofarm Holdings and DermTech
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hydrofarm and DermTech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hydrofarm Holdings Group and DermTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DermTech 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 DermTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DermTech has no effect on the direction of Hydrofarm Holdings i.e., Hydrofarm Holdings and DermTech go up and down completely randomly.
Pair Corralation between Hydrofarm Holdings and DermTech
If you would invest 3.65 in DermTech on November 5, 2024 and sell it today you would earn a total of 0.00 from holding DermTech or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Hydrofarm Holdings Group vs. DermTech
Performance |
| Timeline |
| Hydrofarm Holdings |
| DermTech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hydrofarm Holdings and DermTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydrofarm Holdings and DermTech
The main advantage of trading using opposite Hydrofarm Holdings and DermTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydrofarm Holdings position performs unexpectedly, DermTech 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 DermTech will offset losses from the drop in DermTech's long position.| Hydrofarm Holdings vs. Gencor Industries | Hydrofarm Holdings vs. CEA Industries | Hydrofarm Holdings vs. Arts Way Manufacturing Co | Hydrofarm Holdings vs. Buhler Industries |
| DermTech vs. TransMedics Group | DermTech vs. Curiositystream | DermTech vs. Fulgent Genetics | DermTech vs. Outset Medical |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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