Correlation Between Basic Materials and Hsi Malls
Can any of the company-specific risk be diversified away by investing in both Basic Materials and Hsi Malls 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 Basic Materials and Hsi Malls into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basic Materials and Hsi Malls Fundo, you can compare the effects of market volatilities on Basic Materials and Hsi Malls 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 Basic Materials with a short position of Hsi Malls. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Materials and Hsi Malls.
Diversification Opportunities for Basic Materials and Hsi Malls
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Basic and Hsi is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Basic Materials and Hsi Malls Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsi Malls Fundo and Basic Materials 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 Basic Materials are associated (or correlated) with Hsi Malls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsi Malls Fundo has no effect on the direction of Basic Materials i.e., Basic Materials and Hsi Malls go up and down completely randomly.
Pair Corralation between Basic Materials and Hsi Malls
Assuming the 90 days trading horizon Basic Materials is expected to generate 1.12 times more return on investment than Hsi Malls. However, Basic Materials is 1.12 times more volatile than Hsi Malls Fundo. It trades about 0.02 of its potential returns per unit of risk. Hsi Malls Fundo is currently generating about -0.1 per unit of risk. If you would invest 575,417 in Basic Materials on August 30, 2024 and sell it today you would earn a total of 1,703 from holding Basic Materials or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Basic Materials vs. Hsi Malls Fundo
Performance |
| Timeline |
Basic Materials and Hsi Malls Volatility Contrast
Predicted Return Density |
| Returns |
Basic Materials
Pair trading matchups for Basic Materials
Hsi Malls Fundo
Pair trading matchups for Hsi Malls
Pair Trading with Basic Materials and Hsi Malls
The main advantage of trading using opposite Basic Materials and Hsi Malls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Materials position performs unexpectedly, Hsi Malls 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 Hsi Malls will offset losses from the drop in Hsi Malls' long position.| Basic Materials vs. United Rentals | Basic Materials vs. Livetech da Bahia | Basic Materials vs. Telecomunicaes Brasileiras SA | Basic Materials vs. Charter Communications |
| Hsi Malls vs. Energisa SA | Hsi Malls vs. BTG Pactual Logstica | Hsi Malls vs. Plano Plano Desenvolvimento | Hsi Malls vs. Companhia Habitasul de |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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