Correlation Between HYDROFARM HLD and PT Global

Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD and PT Global 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 HYDROFARM HLD and PT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HYDROFARM HLD GRP and PT Global Mediacom, you can compare the effects of market volatilities on HYDROFARM HLD and PT Global 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 HYDROFARM HLD with a short position of PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and PT Global.

Diversification Opportunities for HYDROFARM HLD and PT Global

-0.01

Correlation Coefficient

HYDROFARM HLD  PT Global

Good diversification

The 3 months correlation between HYDROFARM and 06L is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom and HYDROFARM HLD 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 HYDROFARM HLD GRP are associated (or correlated) with PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of HYDROFARM HLD i.e., HYDROFARM HLD and PT Global go up and down completely randomly.

Pair Corralation between HYDROFARM HLD and PT Global

Assuming the 90 days trading horizon HYDROFARM HLD GRP is expected to generate 1.39 times more return on investment than PT Global. However, HYDROFARM HLD is 1.39 times more volatile than PT Global Mediacom. It trades about 0.01 of its potential returns per unit of risk. PT Global Mediacom is currently generating about -0.12 per unit of risk. If you would invest  58.00  in HYDROFARM HLD GRP on September 23, 2024 and sell it today you would lose (2.00) from holding HYDROFARM HLD GRP or give up 3.45% of portfolio value over 90 days.

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

HYDROFARM HLD GRP  vs.  PT Global Mediacom

HYDROFARM HLD GRP

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days HYDROFARM HLD GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HYDROFARM HLD is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

PT Global Mediacom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Global Mediacom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with HYDROFARM HLD and PT Global

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

The idea behind HYDROFARM HLD GRP and PT Global Mediacom 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.