Correlation Between Halo Collective and Body

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

By analyzing existing cross correlation between Halo Collective and Body And Mind, you can compare the effects of market volatilities on Halo Collective and Body 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 Halo Collective with a short position of Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halo Collective and Body.

Diversification Opportunities for Halo Collective and Body

0.0

Correlation Coefficient

Halo Collective  Body

Pay attention - limited upside

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

Pair Corralation between Halo Collective and Body

If you would invest  1.23  in Body And Mind on December 27, 2024 and sell it today you would lose (0.45) from holding Body And Mind or give up 36.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	56.67%
Values	Daily Returns

Halo Collective  vs.  Body And Mind

Halo Collective

Risk-Adjusted Performance

Very Weak

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

Body And Mind

Risk-Adjusted Performance

Modest

Over the last 90 days Body And Mind has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively fragile primary indicators, Body revealed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Halo Collective and Body

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

The idea behind Halo Collective and Body And Mind 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..