Correlation Between STRC Old and HP
Can any of the company-specific risk be diversified away by investing in both STRC Old and HP 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 STRC Old and HP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRC Old and HP Inc, you can compare the effects of market volatilities on STRC Old and HP 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 STRC Old with a short position of HP. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRC Old and HP.
Diversification Opportunities for STRC Old and HP
Pay attention - limited upside
The 3 months correlation between STRC and HP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STRC Old and HP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HP Inc and STRC Old 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 STRC Old are associated (or correlated) with HP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HP Inc has no effect on the direction of STRC Old i.e., STRC Old and HP go up and down completely randomly.
Pair Corralation between STRC Old and HP
If you would invest 2,706 in HP Inc on November 9, 2024 and sell it today you would earn a total of 554.00 from holding HP Inc or generate 20.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
STRC Old vs. HP Inc
Performance |
| Timeline |
| STRC Old |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| HP Inc |
STRC Old and HP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRC Old and HP
The main advantage of trading using opposite STRC Old and HP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRC Old position performs unexpectedly, HP 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 HP will offset losses from the drop in HP's long position.The idea behind STRC Old and HP Inc 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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