Correlation Between Lease IT and Halcyon Technology
Can any of the company-specific risk be diversified away by investing in both Lease IT and Halcyon Technology 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 Lease IT and Halcyon Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lease IT Public and Halcyon Technology Public, you can compare the effects of market volatilities on Lease IT and Halcyon Technology 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 Lease IT with a short position of Halcyon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lease IT and Halcyon Technology.
Diversification Opportunities for Lease IT and Halcyon Technology
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lease and Halcyon is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lease IT Public and Halcyon Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halcyon Technology Public and Lease IT 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 Lease IT Public are associated (or correlated) with Halcyon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halcyon Technology Public has no effect on the direction of Lease IT i.e., Lease IT and Halcyon Technology go up and down completely randomly.
Pair Corralation between Lease IT and Halcyon Technology
Assuming the 90 days trading horizon Lease IT Public is expected to under-perform the Halcyon Technology. In addition to that, Lease IT is 1.84 times more volatile than Halcyon Technology Public. It trades about -0.22 of its total potential returns per unit of risk. Halcyon Technology Public is currently generating about -0.38 per unit of volatility. If you would invest 416.00 in Halcyon Technology Public on October 7, 2024 and sell it today you would lose (62.00) from holding Halcyon Technology Public or give up 14.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lease IT Public vs. Halcyon Technology Public
Performance |
| Timeline |
| Lease IT Public |
| Halcyon Technology Public |
Lease IT and Halcyon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lease IT and Halcyon Technology
The main advantage of trading using opposite Lease IT and Halcyon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lease IT position performs unexpectedly, Halcyon Technology 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 Halcyon Technology will offset losses from the drop in Halcyon Technology's long position.| Lease IT vs. Multibax Public | Lease IT vs. Forth Smart Service | Lease IT vs. LPN Development Public | Lease IT vs. Netbay Public |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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