Correlation Between Exro Technologies and Hayward Holdings

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

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

Diversification Opportunities for Exro Technologies and Hayward Holdings

-0.67

Correlation Coefficient

Exro Technologies  Hayward Holdings

Excellent diversification

The 3 months correlation between Exro and Hayward is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Exro Technologies and Hayward Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hayward Holdings and Exro Technologies 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 Exro Technologies are associated (or correlated) with Hayward Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hayward Holdings has no effect on the direction of Exro Technologies i.e., Exro Technologies and Hayward Holdings go up and down completely randomly.

Pair Corralation between Exro Technologies and Hayward Holdings

Assuming the 90 days horizon Exro Technologies is expected to under-perform the Hayward Holdings. In addition to that, Exro Technologies is 5.67 times more volatile than Hayward Holdings. It trades about -0.1 of its total potential returns per unit of risk. Hayward Holdings is currently generating about 0.13 per unit of volatility. If you would invest  1,418  in Hayward Holdings on September 2, 2024 and sell it today you would earn a total of  198.00  from holding Hayward Holdings or generate 13.96% return on investment over 90 days.

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

Exro Technologies  vs.  Hayward Holdings

Exro Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exro Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Hayward Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hayward Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Hayward Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exro Technologies and Hayward Holdings

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

The idea behind Exro Technologies and Hayward Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.