Correlation Between Hathway Cable and Silly Monks

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

By analyzing existing cross correlation between Hathway Cable Datacom and Silly Monks Entertainment, you can compare the effects of market volatilities on Hathway Cable and Silly Monks 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 Hathway Cable with a short position of Silly Monks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hathway Cable and Silly Monks.

Diversification Opportunities for Hathway Cable and Silly Monks

0.27

Correlation Coefficient

Hathway Cable  Silly Monks

Modest diversification

The 3 months correlation between Hathway and Silly is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hathway Cable Datacom and Silly Monks Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silly Monks Entertainment and Hathway Cable 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 Hathway Cable Datacom are associated (or correlated) with Silly Monks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silly Monks Entertainment has no effect on the direction of Hathway Cable i.e., Hathway Cable and Silly Monks go up and down completely randomly.

Pair Corralation between Hathway Cable and Silly Monks

Assuming the 90 days trading horizon Hathway Cable is expected to generate 1.81 times less return on investment than Silly Monks. But when comparing it to its historical volatility, Hathway Cable Datacom is 1.37 times less risky than Silly Monks. It trades about 0.01 of its potential returns per unit of risk. Silly Monks Entertainment is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,875  in Silly Monks Entertainment on September 26, 2024 and sell it today you would lose (315.00) from holding Silly Monks Entertainment or give up 10.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.59%
Values	Daily Returns

Hathway Cable Datacom  vs.  Silly Monks Entertainment

Hathway Cable Datacom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hathway Cable Datacom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Silly Monks Entertainment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Silly Monks Entertainment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Silly Monks may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hathway Cable and Silly Monks

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

The idea behind Hathway Cable Datacom and Silly Monks Entertainment 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.