Correlation Between HUTCHMED DRC and East Resources

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

By analyzing existing cross correlation between HUTCHMED DRC and East Resources Acquisition, you can compare the effects of market volatilities on HUTCHMED DRC and East Resources 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 HUTCHMED DRC with a short position of East Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUTCHMED DRC and East Resources.

Diversification Opportunities for HUTCHMED DRC and East Resources

-0.44

Correlation Coefficient

HUTCHMED DRC  East Resources

Very good diversification

The 3 months correlation between HUTCHMED and East is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHMED DRC and East Resources Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Resources Acqui and HUTCHMED DRC 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 HUTCHMED DRC are associated (or correlated) with East Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Resources Acqui has no effect on the direction of HUTCHMED DRC i.e., HUTCHMED DRC and East Resources go up and down completely randomly.

Pair Corralation between HUTCHMED DRC and East Resources

If you would invest  1,248  in HUTCHMED DRC on September 30, 2024 and sell it today you would earn a total of  179.00  from holding HUTCHMED DRC or generate 14.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.27%
Values	Daily Returns

HUTCHMED DRC  vs.  East Resources Acquisition

HUTCHMED DRC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUTCHMED DRC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

East Resources Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days East Resources Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, East Resources is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with HUTCHMED DRC and East Resources

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

The idea behind HUTCHMED DRC and East Resources Acquisition 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 Commodity Directory module to find actively traded commodities issued by global exchanges.