Correlation Between HCM Defender and HCM Defender
Can any of the company-specific risk be diversified away by investing in both HCM Defender and HCM Defender 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 HCM Defender and HCM Defender into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCM Defender 500 and HCM Defender 100, you can compare the effects of market volatilities on HCM Defender and HCM Defender 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 HCM Defender with a short position of HCM Defender. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCM Defender and HCM Defender.
Diversification Opportunities for HCM Defender and HCM Defender
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HCM and HCM is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding HCM Defender 500 and HCM Defender 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCM Defender 100 and HCM Defender 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 HCM Defender 500 are associated (or correlated) with HCM Defender. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCM Defender 100 has no effect on the direction of HCM Defender i.e., HCM Defender and HCM Defender go up and down completely randomly.
Pair Corralation between HCM Defender and HCM Defender
Considering the 90-day investment horizon HCM Defender 500 is expected to generate 0.83 times more return on investment than HCM Defender. However, HCM Defender 500 is 1.2 times less risky than HCM Defender. It trades about -0.01 of its potential returns per unit of risk. HCM Defender 100 is currently generating about -0.09 per unit of risk. If you would invest 5,326 in HCM Defender 500 on October 23, 2024 and sell it today you would lose (22.00) from holding HCM Defender 500 or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
HCM Defender 500 vs. HCM Defender 100
Performance |
| Timeline |
| HCM Defender 500 |
| HCM Defender 100 |
HCM Defender and HCM Defender Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCM Defender and HCM Defender
The main advantage of trading using opposite HCM Defender and HCM Defender positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCM Defender position performs unexpectedly, HCM Defender 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 HCM Defender will offset losses from the drop in HCM Defender's long position.| HCM Defender vs. HCM Defender 100 | HCM Defender vs. Overlay Shares Large | HCM Defender vs. VanEck LongFlat Trend | HCM Defender vs. LeaderSharesTM AlphaFactor Core |
| HCM Defender vs. HCM Defender 500 | HCM Defender vs. Xtrackers SP 500 | HCM Defender vs. Pacer Trendpilot 100 | HCM Defender vs. American Century Quality |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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