Correlation Between Hensel Davest and Cashlez Worldwide

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

By analyzing existing cross correlation between Hensel Davest Indonesia and Cashlez Worldwide Indonesia, you can compare the effects of market volatilities on Hensel Davest and Cashlez Worldwide 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 Hensel Davest with a short position of Cashlez Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hensel Davest and Cashlez Worldwide.

Diversification Opportunities for Hensel Davest and Cashlez Worldwide

0.12

Correlation Coefficient

Hensel Davest  Cashlez Worldwide

Average diversification

The 3 months correlation between Hensel and Cashlez is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hensel Davest Indonesia and Cashlez Worldwide Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cashlez Worldwide and Hensel Davest 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 Hensel Davest Indonesia are associated (or correlated) with Cashlez Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cashlez Worldwide has no effect on the direction of Hensel Davest i.e., Hensel Davest and Cashlez Worldwide go up and down completely randomly.

Pair Corralation between Hensel Davest and Cashlez Worldwide

Assuming the 90 days trading horizon Hensel Davest Indonesia is expected to generate 11.42 times more return on investment than Cashlez Worldwide. However, Hensel Davest is 11.42 times more volatile than Cashlez Worldwide Indonesia. It trades about 0.04 of its potential returns per unit of risk. Cashlez Worldwide Indonesia is currently generating about 0.0 per unit of risk. If you would invest  5,300  in Hensel Davest Indonesia on October 11, 2024 and sell it today you would lose (2,400) from holding Hensel Davest Indonesia or give up 45.28% of portfolio value over 90 days.

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

Hensel Davest Indonesia  vs.  Cashlez Worldwide Indonesia

Hensel Davest Indonesia

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hensel Davest Indonesia are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Hensel Davest disclosed solid returns over the last few months and may actually be approaching a breakup point.

Cashlez Worldwide

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cashlez Worldwide Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Cashlez Worldwide 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 Hensel Davest and Cashlez Worldwide

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

The idea behind Hensel Davest Indonesia and Cashlez Worldwide Indonesia 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.