Correlation Between HE Equipment and Captivision Ordinary

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Can any of the company-specific risk be diversified away by investing in both HE Equipment and Captivision Ordinary 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 HE Equipment and Captivision Ordinary into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and Captivision Ordinary Shares, you can compare the effects of market volatilities on HE Equipment and Captivision Ordinary 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 HE Equipment with a short position of Captivision Ordinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and Captivision Ordinary.

Diversification Opportunities for HE Equipment and Captivision Ordinary

-0.89
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between HEES and Captivision is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and Captivision Ordinary Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Captivision Ordinary and HE Equipment 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 HE Equipment Services are associated (or correlated) with Captivision Ordinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Captivision Ordinary has no effect on the direction of HE Equipment i.e., HE Equipment and Captivision Ordinary go up and down completely randomly.

Pair Corralation between HE Equipment and Captivision Ordinary

Given the investment horizon of 90 days HE Equipment Services is expected to generate 0.33 times more return on investment than Captivision Ordinary. However, HE Equipment Services is 3.01 times less risky than Captivision Ordinary. It trades about 0.15 of its potential returns per unit of risk. Captivision Ordinary Shares is currently generating about -0.2 per unit of risk. If you would invest  4,464  in HE Equipment Services on September 15, 2024 and sell it today you would earn a total of  1,125  from holding HE Equipment Services or generate 25.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

HE Equipment Services  vs.  Captivision Ordinary Shares

 Performance 
       Timeline  
HE Equipment Services 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in HE Equipment Services are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, HE Equipment unveiled solid returns over the last few months and may actually be approaching a breakup point.
Captivision Ordinary 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Captivision Ordinary Shares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

HE Equipment and Captivision Ordinary Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HE Equipment and Captivision Ordinary

The main advantage of trading using opposite HE Equipment and Captivision Ordinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment position performs unexpectedly, Captivision Ordinary 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 Captivision Ordinary will offset losses from the drop in Captivision Ordinary's long position.
The idea behind HE Equipment Services and Captivision Ordinary Shares 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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