Correlation Between DHACW Old and HHG Capital

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

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

Diversification Opportunities for DHACW Old and HHG Capital

0.0

Correlation Coefficient

DHACW Old  HHG Capital

Pay attention - limited upside

The 3 months correlation between DHACW and HHG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DHACW Old and HHG Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HHG Capital and DHACW Old 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 DHACW Old are associated (or correlated) with HHG Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HHG Capital has no effect on the direction of DHACW Old i.e., DHACW Old and HHG Capital go up and down completely randomly.

Pair Corralation between DHACW Old and HHG Capital

If you would invest (100.00) in HHG Capital on December 22, 2024 and sell it today you would earn a total of  100.00  from holding HHG Capital or generate -100.0% return on investment over 90 days.

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

DHACW Old  vs.  HHG Capital

DHACW Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days DHACW Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, DHACW Old is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

HHG Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days HHG Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, HHG Capital is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with DHACW Old and HHG Capital

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

The idea behind DHACW Old and HHG Capital 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.