Correlation Between Hota Industrial and Amulaire Thermal

Can any of the company-specific risk be diversified away by investing in both Hota Industrial and Amulaire Thermal 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 Hota Industrial and Amulaire Thermal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hota Industrial Mfg and Amulaire Thermal Technology, you can compare the effects of market volatilities on Hota Industrial and Amulaire Thermal 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 Hota Industrial with a short position of Amulaire Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hota Industrial and Amulaire Thermal.

Diversification Opportunities for Hota Industrial and Amulaire Thermal

-0.62

Correlation Coefficient

Hota Industrial  Amulaire Thermal

Excellent diversification

The 3 months correlation between Hota and Amulaire is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hota Industrial Mfg and Amulaire Thermal Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amulaire Thermal Tec and Hota Industrial 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 Hota Industrial Mfg are associated (or correlated) with Amulaire Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amulaire Thermal Tec has no effect on the direction of Hota Industrial i.e., Hota Industrial and Amulaire Thermal go up and down completely randomly.

Pair Corralation between Hota Industrial and Amulaire Thermal

Assuming the 90 days trading horizon Hota Industrial Mfg is expected to generate 2.12 times more return on investment than Amulaire Thermal. However, Hota Industrial is 2.12 times more volatile than Amulaire Thermal Technology. It trades about 0.1 of its potential returns per unit of risk. Amulaire Thermal Technology is currently generating about -0.4 per unit of risk. If you would invest  5,950  in Hota Industrial Mfg on September 22, 2024 and sell it today you would earn a total of  440.00  from holding Hota Industrial Mfg or generate 7.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Hota Industrial Mfg  vs.  Amulaire Thermal Technology

Hota Industrial Mfg

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hota Industrial Mfg are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Hota Industrial showed solid returns over the last few months and may actually be approaching a breakup point.

Amulaire Thermal Tec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amulaire Thermal Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Hota Industrial and Amulaire Thermal

The main advantage of trading using opposite Hota Industrial and Amulaire Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hota Industrial position performs unexpectedly, Amulaire Thermal 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 Amulaire Thermal will offset losses from the drop in Amulaire Thermal's long position.

The idea behind Hota Industrial Mfg and Amulaire Thermal Technology 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.