Correlation Between Koss and Hawaiian Electric
Can any of the company-specific risk be diversified away by investing in both Koss and Hawaiian Electric 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 Koss and Hawaiian Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koss Corporation and Hawaiian Electric, you can compare the effects of market volatilities on Koss and Hawaiian Electric 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 Koss with a short position of Hawaiian Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koss and Hawaiian Electric.
Diversification Opportunities for Koss and Hawaiian Electric
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Koss and Hawaiian is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Koss Corp. and Hawaiian Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Electric and Koss 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 Koss Corporation are associated (or correlated) with Hawaiian Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Electric has no effect on the direction of Koss i.e., Koss and Hawaiian Electric go up and down completely randomly.
Pair Corralation between Koss and Hawaiian Electric
If you would invest 1,550 in Hawaiian Electric on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Hawaiian Electric or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Koss Corp. vs. Hawaiian Electric
Performance |
| Timeline |
| Koss |
| Hawaiian Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Koss and Hawaiian Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koss and Hawaiian Electric
The main advantage of trading using opposite Koss and Hawaiian Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koss position performs unexpectedly, Hawaiian Electric 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 Hawaiian Electric will offset losses from the drop in Hawaiian Electric's long position.The idea behind Koss Corporation and Hawaiian Electric pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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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