Correlation Between Holloman Energy and Benchmark Botanics

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

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

Diversification Opportunities for Holloman Energy and Benchmark Botanics

-1.0

Correlation Coefficient

Holloman Energy  Benchmark Botanics

Pay attention - limited upside

The 3 months correlation between Holloman and Benchmark is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding Holloman Energy Corp and Benchmark Botanics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Botanics and Holloman Energy 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 Holloman Energy Corp are associated (or correlated) with Benchmark Botanics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Botanics has no effect on the direction of Holloman Energy i.e., Holloman Energy and Benchmark Botanics go up and down completely randomly.

Pair Corralation between Holloman Energy and Benchmark Botanics

If you would invest  0.34  in Benchmark Botanics on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Benchmark Botanics or generate 0.0% return on investment over 90 days.

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

Holloman Energy Corp  vs.  Benchmark Botanics

Holloman Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Benchmark Botanics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Benchmark Botanics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Benchmark Botanics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Holloman Energy and Benchmark Botanics

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

The idea behind Holloman Energy Corp and Benchmark Botanics 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.