Correlation Between Hawaiian Holdings and Unicharm

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

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

Diversification Opportunities for Hawaiian Holdings and Unicharm

-0.87

Correlation Coefficient

Hawaiian Holdings  Unicharm

Pay attention - limited upside

The 3 months correlation between Hawaiian and Unicharm is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Holdings and Unicharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unicharm and Hawaiian Holdings 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 Hawaiian Holdings are associated (or correlated) with Unicharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unicharm has no effect on the direction of Hawaiian Holdings i.e., Hawaiian Holdings and Unicharm go up and down completely randomly.

Pair Corralation between Hawaiian Holdings and Unicharm

If you would invest  1,800  in Hawaiian Holdings on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Hawaiian Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Hawaiian Holdings  vs.  Unicharm

Hawaiian Holdings

Risk-Adjusted Performance

0 of 100

Very Strong

Over the last 90 days Hawaiian Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat abnormal basic indicators, Hawaiian Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Unicharm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unicharm has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical 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.

Pair Trading with Hawaiian Holdings and Unicharm

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

The idea behind Hawaiian Holdings and Unicharm 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.