Correlation Between Clean Science and Hathway Cable

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

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

Diversification Opportunities for Clean Science and Hathway Cable

0.46

Correlation Coefficient

Clean Science  Hathway Cable

Very weak diversification

The 3 months correlation between Clean and Hathway is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Clean Science and and Hathway Cable Datacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hathway Cable Datacom and Clean Science 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 Clean Science and are associated (or correlated) with Hathway Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hathway Cable Datacom has no effect on the direction of Clean Science i.e., Clean Science and Hathway Cable go up and down completely randomly.

Pair Corralation between Clean Science and Hathway Cable

Assuming the 90 days trading horizon Clean Science is expected to generate 1.23 times less return on investment than Hathway Cable. But when comparing it to its historical volatility, Clean Science and is 1.4 times less risky than Hathway Cable. It trades about 0.01 of its potential returns per unit of risk. Hathway Cable Datacom is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,620  in Hathway Cable Datacom on October 11, 2024 and sell it today you would lose (42.00) from holding Hathway Cable Datacom or give up 2.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.59%
Values	Daily Returns

Clean Science and  vs.  Hathway Cable Datacom

Clean Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clean Science and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Hathway Cable Datacom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hathway Cable Datacom 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 fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Clean Science and Hathway Cable

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

The idea behind Clean Science and and Hathway Cable Datacom 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..