Correlation Between Heico and Byrna Technologies

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

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

Diversification Opportunities for Heico and Byrna Technologies

-0.79

Correlation Coefficient

Heico  Byrna Technologies

Pay attention - limited upside

The 3 months correlation between Heico and Byrna is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Heico and Byrna Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byrna Technologies and Heico 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 Heico are associated (or correlated) with Byrna Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byrna Technologies has no effect on the direction of Heico i.e., Heico and Byrna Technologies go up and down completely randomly.

Pair Corralation between Heico and Byrna Technologies

Considering the 90-day investment horizon Heico is expected to generate 0.43 times more return on investment than Byrna Technologies. However, Heico is 2.31 times less risky than Byrna Technologies. It trades about 0.09 of its potential returns per unit of risk. Byrna Technologies is currently generating about -0.14 per unit of risk. If you would invest  24,083  in Heico on December 27, 2024 and sell it today you would earn a total of  2,800  from holding Heico or generate 11.63% return on investment over 90 days.

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

Heico  vs.  Byrna Technologies

Heico

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Heico are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Heico demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Byrna Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Byrna Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Heico and Byrna Technologies

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

The idea behind Heico and Byrna Technologies 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.