Correlation Between Innovative Solutions and Hexcel
Can any of the company-specific risk be diversified away by investing in both Innovative Solutions and Hexcel 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 Innovative Solutions and Hexcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovative Solutions and and Hexcel, you can compare the effects of market volatilities on Innovative Solutions and Hexcel 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 Innovative Solutions with a short position of Hexcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Solutions and Hexcel.
Diversification Opportunities for Innovative Solutions and Hexcel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Innovative and Hexcel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Solutions and and Hexcel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexcel and Innovative Solutions 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 Innovative Solutions and are associated (or correlated) with Hexcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexcel has no effect on the direction of Innovative Solutions i.e., Innovative Solutions and Hexcel go up and down completely randomly.
Pair Corralation between Innovative Solutions and Hexcel
Given the investment horizon of 90 days Innovative Solutions and is expected to generate 0.81 times more return on investment than Hexcel. However, Innovative Solutions and is 1.24 times less risky than Hexcel. It trades about 0.11 of its potential returns per unit of risk. Hexcel is currently generating about -0.19 per unit of risk. If you would invest 722.00 in Innovative Solutions and on August 23, 2024 and sell it today you would earn a total of 25.00 from holding Innovative Solutions and or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Solutions and vs. Hexcel
Performance |
| Timeline |
| Innovative Solutions and |
| Hexcel |
Innovative Solutions and Hexcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Solutions and Hexcel
The main advantage of trading using opposite Innovative Solutions and Hexcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Solutions position performs unexpectedly, Hexcel 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 Hexcel will offset losses from the drop in Hexcel's long position.| Innovative Solutions vs. Park Electrochemical | Innovative Solutions vs. VSE Corporation | Innovative Solutions vs. Curtiss Wright | Innovative Solutions vs. Ducommun Incorporated |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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