Correlation Between Harn Engineering and Lalin Property

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

By analyzing existing cross correlation between Harn Engineering Solutions and Lalin Property Public, you can compare the effects of market volatilities on Harn Engineering and Lalin Property 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 Harn Engineering with a short position of Lalin Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harn Engineering and Lalin Property.

Diversification Opportunities for Harn Engineering and Lalin Property

0.55

Correlation Coefficient

Harn Engineering  Lalin Property

Very weak diversification

The 3 months correlation between Harn and Lalin is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Harn Engineering Solutions and Lalin Property Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lalin Property Public and Harn Engineering 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 Harn Engineering Solutions are associated (or correlated) with Lalin Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lalin Property Public has no effect on the direction of Harn Engineering i.e., Harn Engineering and Lalin Property go up and down completely randomly.

Pair Corralation between Harn Engineering and Lalin Property

Assuming the 90 days trading horizon Harn Engineering Solutions is expected to under-perform the Lalin Property. But the stock apears to be less risky and, when comparing its historical volatility, Harn Engineering Solutions is 1.04 times less risky than Lalin Property. The stock trades about -0.16 of its potential returns per unit of risk. The Lalin Property Public is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  615.00  in Lalin Property Public on September 29, 2024 and sell it today you would lose (10.00) from holding Lalin Property Public or give up 1.63% of portfolio value over 90 days.

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

Harn Engineering Solutions  vs.  Lalin Property Public

Harn Engineering Sol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harn Engineering Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Harn Engineering is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Lalin Property Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lalin Property Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Harn Engineering and Lalin Property

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

The idea behind Harn Engineering Solutions and Lalin Property Public 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.