Correlation Between Hardide PLC and Accelleron Industries

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

By analyzing existing cross correlation between Hardide PLC and Accelleron Industries AG, you can compare the effects of market volatilities on Hardide PLC and Accelleron Industries 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 Hardide PLC with a short position of Accelleron Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hardide PLC and Accelleron Industries.

Diversification Opportunities for Hardide PLC and Accelleron Industries

-0.75

Correlation Coefficient

Hardide PLC  Accelleron Industries

Pay attention - limited upside

The 3 months correlation between Hardide and Accelleron is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hardide PLC and Accelleron Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelleron Industries and Hardide PLC 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 Hardide PLC are associated (or correlated) with Accelleron Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelleron Industries has no effect on the direction of Hardide PLC i.e., Hardide PLC and Accelleron Industries go up and down completely randomly.

Pair Corralation between Hardide PLC and Accelleron Industries

Assuming the 90 days trading horizon Hardide PLC is expected to under-perform the Accelleron Industries. In addition to that, Hardide PLC is 2.25 times more volatile than Accelleron Industries AG. It trades about -0.04 of its total potential returns per unit of risk. Accelleron Industries AG is currently generating about 0.12 per unit of volatility. If you would invest  2,187  in Accelleron Industries AG on October 6, 2024 and sell it today you would earn a total of  2,495  from holding Accelleron Industries AG or generate 114.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.9%
Values	Daily Returns

Hardide PLC  vs.  Accelleron Industries AG

Hardide PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hardide PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Hardide PLC is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Accelleron Industries

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Accelleron Industries AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Accelleron Industries may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hardide PLC and Accelleron Industries

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

The idea behind Hardide PLC and Accelleron Industries AG 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.