Correlation Between HYDROFARM HLD and TTM TECHNOLOGIES

Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD and TTM TECHNOLOGIES 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 TTM TECHNOLOGIES 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 TTM TECHNOLOGIES, you can compare the effects of market volatilities on HYDROFARM HLD and TTM TECHNOLOGIES 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 TTM TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and TTM TECHNOLOGIES.

Diversification Opportunities for HYDROFARM HLD and TTM TECHNOLOGIES

-0.03

Correlation Coefficient

HYDROFARM HLD  TTM TECHNOLOGIES

Good diversification

The 3 months correlation between HYDROFARM and TTM is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and TTM TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM TECHNOLOGIES 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 TTM TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM TECHNOLOGIES has no effect on the direction of HYDROFARM HLD i.e., HYDROFARM HLD and TTM TECHNOLOGIES go up and down completely randomly.

Pair Corralation between HYDROFARM HLD and TTM TECHNOLOGIES

Assuming the 90 days trading horizon HYDROFARM HLD is expected to generate 94.97 times less return on investment than TTM TECHNOLOGIES. In addition to that, HYDROFARM HLD is 2.22 times more volatile than TTM TECHNOLOGIES. It trades about 0.0 of its total potential returns per unit of risk. TTM TECHNOLOGIES is currently generating about 0.22 per unit of volatility. If you would invest  1,820  in TTM TECHNOLOGIES on October 25, 2024 and sell it today you would earn a total of  640.00  from holding TTM TECHNOLOGIES or generate 35.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

HYDROFARM HLD GRP  vs.  TTM TECHNOLOGIES

HYDROFARM HLD GRP

Risk-Adjusted Performance

0 of 100

Very 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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

TTM TECHNOLOGIES

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TTM TECHNOLOGIES are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, TTM TECHNOLOGIES unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HYDROFARM HLD and TTM TECHNOLOGIES

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

The idea behind HYDROFARM HLD GRP and TTM TECHNOLOGIES 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.