Correlation Between POWR Lithium and Hurco Companies
Can any of the company-specific risk be diversified away by investing in both POWR Lithium and Hurco Companies 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 POWR Lithium and Hurco Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POWR Lithium Corp and Hurco Companies, you can compare the effects of market volatilities on POWR Lithium and Hurco Companies 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 POWR Lithium with a short position of Hurco Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of POWR Lithium and Hurco Companies.
Diversification Opportunities for POWR Lithium and Hurco Companies
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between POWR and Hurco is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding POWR Lithium Corp and Hurco Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurco Companies and POWR Lithium 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 POWR Lithium Corp are associated (or correlated) with Hurco Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurco Companies has no effect on the direction of POWR Lithium i.e., POWR Lithium and Hurco Companies go up and down completely randomly.
Pair Corralation between POWR Lithium and Hurco Companies
Assuming the 90 days horizon POWR Lithium Corp is expected to under-perform the Hurco Companies. In addition to that, POWR Lithium is 5.17 times more volatile than Hurco Companies. It trades about -0.09 of its total potential returns per unit of risk. Hurco Companies is currently generating about 0.22 per unit of volatility. If you would invest 2,110 in Hurco Companies on September 3, 2024 and sell it today you would earn a total of 222.00 from holding Hurco Companies or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
POWR Lithium Corp vs. Hurco Companies
Performance |
| Timeline |
| POWR Lithium Corp |
| Hurco Companies |
POWR Lithium and Hurco Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POWR Lithium and Hurco Companies
The main advantage of trading using opposite POWR Lithium and Hurco Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POWR Lithium position performs unexpectedly, Hurco Companies 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 Hurco Companies will offset losses from the drop in Hurco Companies' long position.| POWR Lithium vs. Apple Inc | POWR Lithium vs. Microsoft | POWR Lithium vs. Amazon Inc | POWR Lithium vs. Alphabet Inc Class C |
| Hurco Companies vs. Enerpac Tool Group | Hurco Companies vs. Enpro Industries | Hurco Companies vs. Omega Flex | Hurco Companies vs. Gorman Rupp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |