Correlation Between Procyon and Hypera SA
Can any of the company-specific risk be diversified away by investing in both Procyon and Hypera SA 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 Procyon and Hypera SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procyon and Hypera SA, you can compare the effects of market volatilities on Procyon and Hypera SA 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 Procyon with a short position of Hypera SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procyon and Hypera SA.
Diversification Opportunities for Procyon and Hypera SA
Modest diversification
The 3 months correlation between Procyon and Hypera is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Procyon and Hypera SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hypera SA and Procyon 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 Procyon are associated (or correlated) with Hypera SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hypera SA has no effect on the direction of Procyon i.e., Procyon and Hypera SA go up and down completely randomly.
Pair Corralation between Procyon and Hypera SA
Given the investment horizon of 90 days Procyon is expected to generate 2.67 times more return on investment than Hypera SA. However, Procyon is 2.67 times more volatile than Hypera SA. It trades about 0.02 of its potential returns per unit of risk. Hypera SA is currently generating about -0.06 per unit of risk. If you would invest 25.00 in Procyon on August 28, 2024 and sell it today you would lose (5.00) from holding Procyon or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Procyon vs. Hypera SA
Performance |
| Timeline |
| Procyon |
| Hypera SA |
Procyon and Hypera SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procyon and Hypera SA
The main advantage of trading using opposite Procyon and Hypera SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procyon position performs unexpectedly, Hypera SA 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 Hypera SA will offset losses from the drop in Hypera SA's long position.The idea behind Procyon and Hypera SA 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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