Correlation Between ClearOne and Hop On

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

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

Diversification Opportunities for ClearOne and Hop On

-0.81

Correlation Coefficient

ClearOne  Hop On

Pay attention - limited upside

The 3 months correlation between ClearOne and Hop is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding ClearOne and Hop On Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hop On Inc and ClearOne 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 ClearOne are associated (or correlated) with Hop On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hop On Inc has no effect on the direction of ClearOne i.e., ClearOne and Hop On go up and down completely randomly.

Pair Corralation between ClearOne and Hop On

Given the investment horizon of 90 days ClearOne is expected to generate 3.69 times less return on investment than Hop On. But when comparing it to its historical volatility, ClearOne is 1.71 times less risky than Hop On. It trades about 0.04 of its potential returns per unit of risk. Hop On Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.05  in Hop On Inc on September 5, 2024 and sell it today you would earn a total of  0.02  from holding Hop On Inc or generate 40.0% return on investment over 90 days.

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

ClearOne  vs.  Hop On Inc

ClearOne

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hop On Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hop On Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Hop On displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ClearOne and Hop On

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

The idea behind ClearOne and Hop On Inc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.