Correlation Between Bolt Projects and Hewlett Packard

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

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

Diversification Opportunities for Bolt Projects and Hewlett Packard

-0.45

Correlation Coefficient

Bolt Projects  Hewlett Packard

Very good diversification

The 3 months correlation between Bolt and Hewlett is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bolt Projects Holdings, and Hewlett Packard Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hewlett Packard Ente and Bolt Projects 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 Bolt Projects Holdings, are associated (or correlated) with Hewlett Packard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hewlett Packard Ente has no effect on the direction of Bolt Projects i.e., Bolt Projects and Hewlett Packard go up and down completely randomly.

Pair Corralation between Bolt Projects and Hewlett Packard

Assuming the 90 days horizon Bolt Projects Holdings, is expected to generate 14.28 times more return on investment than Hewlett Packard. However, Bolt Projects is 14.28 times more volatile than Hewlett Packard Enterprise. It trades about 0.1 of its potential returns per unit of risk. Hewlett Packard Enterprise is currently generating about -0.15 per unit of risk. If you would invest  4.00  in Bolt Projects Holdings, on December 21, 2024 and sell it today you would lose (0.01) from holding Bolt Projects Holdings, or give up 0.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	61.02%
Values	Daily Returns

Bolt Projects Holdings,  vs.  Hewlett Packard Enterprise

Bolt Projects Holdings,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bolt Projects Holdings, are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward-looking signals, Bolt Projects showed solid returns over the last few months and may actually be approaching a breakup point.

Hewlett Packard Ente

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hewlett Packard Enterprise 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Bolt Projects and Hewlett Packard

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

The idea behind Bolt Projects Holdings, and Hewlett Packard Enterprise 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..