Correlation Between CVW CLEANTECH and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and HYDROFARM HLD 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 CVW CLEANTECH and HYDROFARM HLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CLEANTECH INC and HYDROFARM HLD GRP, you can compare the effects of market volatilities on CVW CLEANTECH and HYDROFARM HLD 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 CVW CLEANTECH with a short position of HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and HYDROFARM HLD.
Diversification Opportunities for CVW CLEANTECH and HYDROFARM HLD
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CVW and HYDROFARM is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and HYDROFARM HLD GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROFARM HLD GRP and CVW CLEANTECH 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 CVW CLEANTECH INC are associated (or correlated) with HYDROFARM HLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROFARM HLD GRP has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and HYDROFARM HLD
Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to generate 0.61 times more return on investment than HYDROFARM HLD. However, CVW CLEANTECH INC is 1.64 times less risky than HYDROFARM HLD. It trades about -0.11 of its potential returns per unit of risk. HYDROFARM HLD GRP is currently generating about -0.1 per unit of risk. If you would invest 58.00 in CVW CLEANTECH INC on October 17, 2024 and sell it today you would lose (5.00) from holding CVW CLEANTECH INC or give up 8.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
CVW CLEANTECH INC vs. HYDROFARM HLD GRP
Performance |
| Timeline |
| CVW CLEANTECH INC |
| HYDROFARM HLD GRP |
CVW CLEANTECH and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and HYDROFARM HLD
The main advantage of trading using opposite CVW CLEANTECH and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH position performs unexpectedly, HYDROFARM HLD 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 HYDROFARM HLD will offset losses from the drop in HYDROFARM HLD's long position.| CVW CLEANTECH vs. AEON STORES | CVW CLEANTECH vs. The Japan Steel | CVW CLEANTECH vs. FAST RETAIL ADR | CVW CLEANTECH vs. COSTCO WHOLESALE CDR |
| HYDROFARM HLD vs. EAT WELL INVESTMENT | HYDROFARM HLD vs. CDL INVESTMENT | HYDROFARM HLD vs. New Residential Investment | HYDROFARM HLD vs. CVW CLEANTECH INC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |