Correlation Between HHG Capital and International Luxury

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

By analyzing existing cross correlation between HHG Capital Corp and International Luxury Products, you can compare the effects of market volatilities on HHG Capital and International Luxury 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 HHG Capital with a short position of International Luxury. Check out your portfolio center. Please also check ongoing floating volatility patterns of HHG Capital and International Luxury.

Diversification Opportunities for HHG Capital and International Luxury

0.0

Correlation Coefficient

HHG Capital  International Luxury

Pay attention - limited upside

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

Pair Corralation between HHG Capital and International Luxury

If you would invest  1.69  in International Luxury Products on September 17, 2024 and sell it today you would earn a total of  0.00  from holding International Luxury Products or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

HHG Capital Corp  vs.  International Luxury Products

HHG Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HHG Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

International Luxury

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Luxury Products has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, International Luxury is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with HHG Capital and International Luxury

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

The idea behind HHG Capital Corp and International Luxury Products 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.