Correlation Between Hawesko Holding and CDL INVESTMENT

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

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

Diversification Opportunities for Hawesko Holding and CDL INVESTMENT

0.23

Correlation Coefficient

Hawesko Holding  CDL INVESTMENT

Modest diversification

The 3 months correlation between Hawesko and CDL is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hawesko Holding AG and CDL INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDL INVESTMENT and Hawesko Holding 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 Hawesko Holding AG are associated (or correlated) with CDL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDL INVESTMENT has no effect on the direction of Hawesko Holding i.e., Hawesko Holding and CDL INVESTMENT go up and down completely randomly.

Pair Corralation between Hawesko Holding and CDL INVESTMENT

Assuming the 90 days trading horizon Hawesko Holding AG is expected to under-perform the CDL INVESTMENT. In addition to that, Hawesko Holding is 1.05 times more volatile than CDL INVESTMENT. It trades about -0.01 of its total potential returns per unit of risk. CDL INVESTMENT is currently generating about 0.03 per unit of volatility. If you would invest  35.00  in CDL INVESTMENT on October 4, 2024 and sell it today you would earn a total of  8.00  from holding CDL INVESTMENT or generate 22.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.2%
Values	Daily Returns

Hawesko Holding AG  vs.  CDL INVESTMENT

Hawesko Holding AG

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hawesko Holding AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Hawesko Holding is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CDL INVESTMENT

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CDL INVESTMENT are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, CDL INVESTMENT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hawesko Holding and CDL INVESTMENT

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

The idea behind Hawesko Holding AG and CDL INVESTMENT 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.