Correlation Between Honest and Safe Pro

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

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

Diversification Opportunities for Honest and Safe Pro

0.27

Correlation Coefficient

Honest  Safe Pro

Modest diversification

The 3 months correlation between Honest and Safe is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Honest Company and Safe Pro Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Pro Group and Honest 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 Honest Company are associated (or correlated) with Safe Pro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Pro Group has no effect on the direction of Honest i.e., Honest and Safe Pro go up and down completely randomly.

Pair Corralation between Honest and Safe Pro

Given the investment horizon of 90 days Honest Company is expected to under-perform the Safe Pro. But the stock apears to be less risky and, when comparing its historical volatility, Honest Company is 3.07 times less risky than Safe Pro. The stock trades about -0.11 of its potential returns per unit of risk. The Safe Pro Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  340.00  in Safe Pro Group on December 19, 2024 and sell it today you would lose (39.00) from holding Safe Pro Group or give up 11.47% of portfolio value over 90 days.

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

Honest Company  vs.  Safe Pro Group

Honest Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days Honest Company 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Safe Pro Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Safe Pro Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Safe Pro demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Honest and Safe Pro

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

The idea behind Honest Company and Safe Pro Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.