Correlation Between Hayward Holdings and Loop Energy

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

By analyzing existing cross correlation between Hayward Holdings and Loop Energy, you can compare the effects of market volatilities on Hayward Holdings and Loop Energy 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 Loop Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hayward Holdings and Loop Energy.

Diversification Opportunities for Hayward Holdings and Loop Energy

0.0

Correlation Coefficient

Hayward Holdings  Loop Energy

Pay attention - limited upside

The 3 months correlation between Hayward and Loop is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hayward Holdings and Loop Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Energy 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 Loop Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Energy has no effect on the direction of Hayward Holdings i.e., Hayward Holdings and Loop Energy go up and down completely randomly.

Pair Corralation between Hayward Holdings and Loop Energy

If you would invest  1,425  in Hayward Holdings on September 4, 2024 and sell it today you would earn a total of  175.00  from holding Hayward Holdings or generate 12.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hayward Holdings  vs.  Loop Energy

Hayward Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hayward Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Hayward Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Loop Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loop Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Loop Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hayward Holdings and Loop Energy

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

The idea behind Hayward Holdings and Loop Energy 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.