Correlation Between Hayward Holdings and Ryan Specialty

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

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

Diversification Opportunities for Hayward Holdings and Ryan Specialty

0.38

Correlation Coefficient

Hayward Holdings  Ryan Specialty

Weak diversification

The 3 months correlation between Hayward and Ryan is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hayward Holdings and Ryan Specialty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryan Specialty Group 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 Ryan Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryan Specialty Group has no effect on the direction of Hayward Holdings i.e., Hayward Holdings and Ryan Specialty go up and down completely randomly.

Pair Corralation between Hayward Holdings and Ryan Specialty

Given the investment horizon of 90 days Hayward Holdings is expected to under-perform the Ryan Specialty. But the stock apears to be less risky and, when comparing its historical volatility, Hayward Holdings is 1.06 times less risky than Ryan Specialty. The stock trades about -0.1 of its potential returns per unit of risk. The Ryan Specialty Group is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  7,404  in Ryan Specialty Group on December 2, 2024 and sell it today you would lose (405.00) from holding Ryan Specialty Group or give up 5.47% of portfolio value over 90 days.

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

Hayward Holdings  vs.  Ryan Specialty Group

Hayward Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hayward Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Ryan Specialty Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ryan Specialty Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ryan Specialty is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hayward Holdings and Ryan Specialty

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

The idea behind Hayward Holdings and Ryan Specialty Group 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.