Correlation Between Homeco Daily and Galena Mining

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

By analyzing existing cross correlation between Homeco Daily Needs and Galena Mining, you can compare the effects of market volatilities on Homeco Daily and Galena Mining 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 Homeco Daily with a short position of Galena Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homeco Daily and Galena Mining.

Diversification Opportunities for Homeco Daily and Galena Mining

0.0

Correlation Coefficient

Homeco Daily  Galena Mining

Pay attention - limited upside

The 3 months correlation between Homeco and Galena is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Homeco Daily Needs and Galena Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galena Mining and Homeco Daily 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 Homeco Daily Needs are associated (or correlated) with Galena Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galena Mining has no effect on the direction of Homeco Daily i.e., Homeco Daily and Galena Mining go up and down completely randomly.

Pair Corralation between Homeco Daily and Galena Mining

If you would invest  5.90  in Galena Mining on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Galena Mining or generate 0.0% return on investment over 90 days.

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

Homeco Daily Needs  vs.  Galena Mining

Homeco Daily Needs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Homeco Daily Needs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Galena Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Homeco Daily and Galena Mining

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

The idea behind Homeco Daily Needs and Galena Mining 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.