Correlation Between Hawaiian Telcom and AdvisorShares Gerber

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

By analyzing existing cross correlation between Hawaiian Telcom Holdco and AdvisorShares Gerber Kawasaki, you can compare the effects of market volatilities on Hawaiian Telcom and AdvisorShares Gerber 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 Hawaiian Telcom with a short position of AdvisorShares Gerber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Telcom and AdvisorShares Gerber.

Diversification Opportunities for Hawaiian Telcom and AdvisorShares Gerber

-0.06

Correlation Coefficient

Hawaiian Telcom  AdvisorShares Gerber

Good diversification

The 3 months correlation between Hawaiian and AdvisorShares is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Telcom Holdco and AdvisorShares Gerber Kawasaki in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Gerber and Hawaiian Telcom 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 Hawaiian Telcom Holdco are associated (or correlated) with AdvisorShares Gerber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Gerber has no effect on the direction of Hawaiian Telcom i.e., Hawaiian Telcom and AdvisorShares Gerber go up and down completely randomly.

Pair Corralation between Hawaiian Telcom and AdvisorShares Gerber

Given the investment horizon of 90 days Hawaiian Telcom Holdco is expected to generate 0.57 times more return on investment than AdvisorShares Gerber. However, Hawaiian Telcom Holdco is 1.76 times less risky than AdvisorShares Gerber. It trades about 0.21 of its potential returns per unit of risk. AdvisorShares Gerber Kawasaki is currently generating about -0.07 per unit of risk. If you would invest  1,430  in Hawaiian Telcom Holdco on November 28, 2024 and sell it today you would earn a total of  111.00  from holding Hawaiian Telcom Holdco or generate 7.76% return on investment over 90 days.

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

Hawaiian Telcom Holdco  vs.  AdvisorShares Gerber Kawasaki

Hawaiian Telcom Holdco

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hawaiian Telcom Holdco are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Hawaiian Telcom may actually be approaching a critical reversion point that can send shares even higher in March 2025.

AdvisorShares Gerber

Risk-Adjusted Performance

Very Weak

Over the last 90 days AdvisorShares Gerber Kawasaki has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, AdvisorShares Gerber is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Hawaiian Telcom and AdvisorShares Gerber

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

The idea behind Hawaiian Telcom Holdco and AdvisorShares Gerber Kawasaki 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.