Correlation Between HUTCHMED DRC and Harsco

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

By analyzing existing cross correlation between HUTCHMED DRC and Harsco 575 percent, you can compare the effects of market volatilities on HUTCHMED DRC and Harsco 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 Harsco. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUTCHMED DRC and Harsco.

Diversification Opportunities for HUTCHMED DRC and Harsco

0.38

Correlation Coefficient

HUTCHMED DRC  Harsco

Weak diversification

The 3 months correlation between HUTCHMED and Harsco is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHMED DRC and Harsco 575 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harsco 575 percent 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 Harsco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harsco 575 percent has no effect on the direction of HUTCHMED DRC i.e., HUTCHMED DRC and Harsco go up and down completely randomly.

Pair Corralation between HUTCHMED DRC and Harsco

Considering the 90-day investment horizon HUTCHMED DRC is expected to generate 39.95 times less return on investment than Harsco. But when comparing it to its historical volatility, HUTCHMED DRC is 11.66 times less risky than Harsco. It trades about 0.01 of its potential returns per unit of risk. Harsco 575 percent is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  8,431  in Harsco 575 percent on October 15, 2024 and sell it today you would earn a total of  172.00  from holding Harsco 575 percent or generate 2.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.1%
Values	Daily Returns

HUTCHMED DRC  vs.  Harsco 575 percent

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 weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Harsco 575 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harsco 575 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for Harsco 575 percent investors.

Pair Trading with HUTCHMED DRC and Harsco

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

The idea behind HUTCHMED DRC and Harsco 575 percent 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.