Correlation Between Aterian and Hawkins

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

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

Diversification Opportunities for Aterian and Hawkins

-0.03

Correlation Coefficient

Aterian  Hawkins

Good diversification

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

Pair Corralation between Aterian and Hawkins

Given the investment horizon of 90 days Aterian is expected to under-perform the Hawkins. In addition to that, Aterian is 1.11 times more volatile than Hawkins. It trades about -0.1 of its total potential returns per unit of risk. Hawkins is currently generating about -0.09 per unit of volatility. If you would invest  13,256  in Hawkins on October 15, 2024 and sell it today you would lose (2,173) from holding Hawkins or give up 16.39% of portfolio value over 90 days.

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

Aterian  vs.  Hawkins

Aterian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aterian has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Hawkins

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hawkins has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Aterian and Hawkins

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

The idea behind Aterian and Hawkins 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.