Correlation Between Harvatek Corp and Epileds Technologies

Can any of the company-specific risk be diversified away by investing in both Harvatek Corp and Epileds 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 Harvatek Corp and Epileds Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harvatek Corp and Epileds Technologies, you can compare the effects of market volatilities on Harvatek Corp and Epileds 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 Harvatek Corp with a short position of Epileds Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvatek Corp and Epileds Technologies.

Diversification Opportunities for Harvatek Corp and Epileds Technologies

0.51

Correlation Coefficient

Harvatek Corp  Epileds Technologies

Very weak diversification

The 3 months correlation between Harvatek and Epileds is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Harvatek Corp and Epileds Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epileds Technologies and Harvatek Corp 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 Harvatek Corp are associated (or correlated) with Epileds Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epileds Technologies has no effect on the direction of Harvatek Corp i.e., Harvatek Corp and Epileds Technologies go up and down completely randomly.

Pair Corralation between Harvatek Corp and Epileds Technologies

Assuming the 90 days trading horizon Harvatek Corp is expected to generate 1.05 times more return on investment than Epileds Technologies. However, Harvatek Corp is 1.05 times more volatile than Epileds Technologies. It trades about 0.14 of its potential returns per unit of risk. Epileds Technologies is currently generating about -0.1 per unit of risk. If you would invest  2,210  in Harvatek Corp on October 9, 2024 and sell it today you would earn a total of  210.00  from holding Harvatek Corp or generate 9.5% return on investment over 90 days.

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

Harvatek Corp  vs.  Epileds Technologies

Harvatek Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Harvatek Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Harvatek Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Epileds Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Epileds Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Epileds Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harvatek Corp and Epileds Technologies

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

The idea behind Harvatek Corp and Epileds 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.