Correlation Between Hayward Holdings and Hollysys Automation

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

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

Diversification Opportunities for Hayward Holdings and Hollysys Automation

0.35

Correlation Coefficient

Hayward Holdings  Hollysys Automation

Weak diversification

The 3 months correlation between Hayward and Hollysys is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hayward Holdings and Hollysys Automation Technologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollysys Automation and Hayward 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 Hayward Holdings are associated (or correlated) with Hollysys Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollysys Automation has no effect on the direction of Hayward Holdings i.e., Hayward Holdings and Hollysys Automation go up and down completely randomly.

Pair Corralation between Hayward Holdings and Hollysys Automation

If you would invest  1,484  in Hayward Holdings on August 30, 2024 and sell it today you would earn a total of  134.00  from holding Hayward Holdings or generate 9.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Hayward Holdings  vs.  Hollysys Automation Technologi

Hayward Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hayward Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Hayward Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Hollysys Automation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hollysys Automation Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Hollysys Automation is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Hayward Holdings and Hollysys Automation

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

The idea behind Hayward Holdings and Hollysys Automation Technologies 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.