Correlation Between Hrcules SA and Coty

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

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

Diversification Opportunities for Hrcules SA and Coty

0.1

Correlation Coefficient

Hrcules SA  Coty

Average diversification

The 3 months correlation between Hrcules and Coty is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hrcules SA and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc and Hrcules SA 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 Hrcules SA are associated (or correlated) with Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of Hrcules SA i.e., Hrcules SA and Coty go up and down completely randomly.

Pair Corralation between Hrcules SA and Coty

If you would invest (100.00) in Hrcules SA on October 10, 2024 and sell it today you would earn a total of  100.00  from holding Hrcules SA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Hrcules SA   vs.  Coty Inc

Hrcules SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Coty Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coty Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hrcules SA and Coty

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

The idea behind Hrcules SA and Coty Inc 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.