Correlation Between Pro Dex and Hoya Corp
Can any of the company-specific risk be diversified away by investing in both Pro Dex and Hoya Corp 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 Pro Dex and Hoya Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Dex and Hoya Corp, you can compare the effects of market volatilities on Pro Dex and Hoya Corp 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 Pro Dex with a short position of Hoya Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro Dex and Hoya Corp.
Diversification Opportunities for Pro Dex and Hoya Corp
Very good diversification
The 3 months correlation between Pro and Hoya is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pro Dex and Hoya Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoya Corp and Pro Dex 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 Pro Dex are associated (or correlated) with Hoya Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoya Corp has no effect on the direction of Pro Dex i.e., Pro Dex and Hoya Corp go up and down completely randomly.
Pair Corralation between Pro Dex and Hoya Corp
Given the investment horizon of 90 days Pro Dex is expected to generate 2.1 times more return on investment than Hoya Corp. However, Pro Dex is 2.1 times more volatile than Hoya Corp. It trades about 0.16 of its potential returns per unit of risk. Hoya Corp is currently generating about 0.04 per unit of risk. If you would invest 1,967 in Pro Dex on August 24, 2024 and sell it today you would earn a total of 2,266 from holding Pro Dex or generate 115.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pro Dex vs. Hoya Corp
Performance |
| Timeline |
| Pro Dex |
| Hoya Corp |
Pro Dex and Hoya Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro Dex and Hoya Corp
The main advantage of trading using opposite Pro Dex and Hoya Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Dex position performs unexpectedly, Hoya Corp 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 Hoya Corp will offset losses from the drop in Hoya Corp's long position.| Pro Dex vs. Coloplast A | Pro Dex vs. Straumann Holding AG | Pro Dex vs. Nephros | Pro Dex vs. InfuSystems Holdings |
| Hoya Corp vs. BioLife Sciences | Hoya Corp vs. GlucoTrack | Hoya Corp vs. Sharps Technology | Hoya Corp vs. Wearable Health Solutions |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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