Correlation Between Intercontinental and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both Intercontinental and HYDROFARM HLD 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 Intercontinental and HYDROFARM HLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intercontinental Exchange and HYDROFARM HLD GRP, you can compare the effects of market volatilities on Intercontinental and HYDROFARM HLD 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 Intercontinental with a short position of HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intercontinental and HYDROFARM HLD.
Diversification Opportunities for Intercontinental and HYDROFARM HLD
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intercontinental and HYDROFARM is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Intercontinental Exchange and HYDROFARM HLD GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROFARM HLD GRP and Intercontinental 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 Intercontinental Exchange are associated (or correlated) with HYDROFARM HLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROFARM HLD GRP has no effect on the direction of Intercontinental i.e., Intercontinental and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between Intercontinental and HYDROFARM HLD
Assuming the 90 days horizon Intercontinental Exchange is expected to generate 0.21 times more return on investment than HYDROFARM HLD. However, Intercontinental Exchange is 4.69 times less risky than HYDROFARM HLD. It trades about 0.08 of its potential returns per unit of risk. HYDROFARM HLD GRP is currently generating about -0.02 per unit of risk. If you would invest 9,623 in Intercontinental Exchange on October 25, 2024 and sell it today you would earn a total of 5,161 from holding Intercontinental Exchange or generate 53.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intercontinental Exchange vs. HYDROFARM HLD GRP
Performance |
| Timeline |
| Intercontinental Exchange |
| HYDROFARM HLD GRP |
Intercontinental and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intercontinental and HYDROFARM HLD
The main advantage of trading using opposite Intercontinental and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intercontinental position performs unexpectedly, HYDROFARM HLD 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 HYDROFARM HLD will offset losses from the drop in HYDROFARM HLD's long position.| Intercontinental vs. VARIOUS EATERIES LS | Intercontinental vs. Tradeweb Markets | Intercontinental vs. FLOW TRADERS LTD | Intercontinental vs. WT OFFSHORE |
| HYDROFARM HLD vs. Entravision Communications | HYDROFARM HLD vs. Align Technology | HYDROFARM HLD vs. SMA Solar Technology | HYDROFARM HLD vs. Grupo Carso SAB |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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