Correlation Between Corning Incorporated and HP

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

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

Diversification Opportunities for Corning Incorporated and HP

0.46

Correlation Coefficient

Corning Incorporated  HP

Very weak diversification

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

Pair Corralation between Corning Incorporated and HP

Considering the 90-day investment horizon Corning Incorporated is expected to generate 1.37 times more return on investment than HP. However, Corning Incorporated is 1.37 times more volatile than HP Inc. It trades about 0.0 of its potential returns per unit of risk. HP Inc is currently generating about -0.13 per unit of risk. If you would invest  4,772  in Corning Incorporated on December 26, 2024 and sell it today you would lose (42.00) from holding Corning Incorporated or give up 0.88% of portfolio value over 90 days.

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

Corning Incorporated  vs.  HP Inc

Corning Incorporated

Risk-Adjusted Performance

Weak

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

HP Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days HP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Corning Incorporated and HP

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

The idea behind Corning Incorporated and HP 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.