Correlation Between GEAR4MUSIC (HLDGS) and HALSTEAD JAMES

Can any of the company-specific risk be diversified away by investing in both GEAR4MUSIC (HLDGS) and HALSTEAD JAMES 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 GEAR4MUSIC (HLDGS) and HALSTEAD JAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GEAR4MUSIC LS 10 and HALSTEAD JAMES LS 05, you can compare the effects of market volatilities on GEAR4MUSIC (HLDGS) and HALSTEAD JAMES 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 GEAR4MUSIC (HLDGS) with a short position of HALSTEAD JAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEAR4MUSIC (HLDGS) and HALSTEAD JAMES.

Diversification Opportunities for GEAR4MUSIC (HLDGS) and HALSTEAD JAMES

-0.6

Correlation Coefficient

GEAR4MUSIC (HLDGS)  HALSTEAD JAMES

Excellent diversification

The 3 months correlation between GEAR4MUSIC and HALSTEAD is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding GEAR4MUSIC LS 10 and HALSTEAD JAMES LS 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HALSTEAD JAMES LS and GEAR4MUSIC (HLDGS) 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 GEAR4MUSIC LS 10 are associated (or correlated) with HALSTEAD JAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HALSTEAD JAMES LS has no effect on the direction of GEAR4MUSIC (HLDGS) i.e., GEAR4MUSIC (HLDGS) and HALSTEAD JAMES go up and down completely randomly.

Pair Corralation between GEAR4MUSIC (HLDGS) and HALSTEAD JAMES

Assuming the 90 days horizon GEAR4MUSIC LS 10 is expected to generate 1.09 times more return on investment than HALSTEAD JAMES. However, GEAR4MUSIC (HLDGS) is 1.09 times more volatile than HALSTEAD JAMES LS 05. It trades about -0.02 of its potential returns per unit of risk. HALSTEAD JAMES LS 05 is currently generating about -0.19 per unit of risk. If you would invest  193.00  in GEAR4MUSIC LS 10 on October 10, 2024 and sell it today you would lose (3.00) from holding GEAR4MUSIC LS 10 or give up 1.55% of portfolio value over 90 days.

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

GEAR4MUSIC LS 10  vs.  HALSTEAD JAMES LS 05

GEAR4MUSIC (HLDGS)

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GEAR4MUSIC LS 10 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, GEAR4MUSIC (HLDGS) is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

HALSTEAD JAMES LS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HALSTEAD JAMES LS 05 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking indicators, HALSTEAD JAMES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GEAR4MUSIC (HLDGS) and HALSTEAD JAMES

The main advantage of trading using opposite GEAR4MUSIC (HLDGS) and HALSTEAD JAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEAR4MUSIC (HLDGS) position performs unexpectedly, HALSTEAD JAMES 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 HALSTEAD JAMES will offset losses from the drop in HALSTEAD JAMES's long position.

The idea behind GEAR4MUSIC LS 10 and HALSTEAD JAMES LS 05 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.