Correlation Between Hoya Corp and CeCors

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

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

Diversification Opportunities for Hoya Corp and CeCors

0.35

Correlation Coefficient

Hoya Corp  CeCors

Weak diversification

The 3 months correlation between Hoya and CeCors is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hoya Corp and CeCors Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeCors Inc and Hoya Corp 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 Hoya Corp are associated (or correlated) with CeCors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeCors Inc has no effect on the direction of Hoya Corp i.e., Hoya Corp and CeCors go up and down completely randomly.

Pair Corralation between Hoya Corp and CeCors

Assuming the 90 days horizon Hoya Corp is expected to generate 0.15 times more return on investment than CeCors. However, Hoya Corp is 6.67 times less risky than CeCors. It trades about -0.09 of its potential returns per unit of risk. CeCors Inc is currently generating about -0.15 per unit of risk. If you would invest  13,105  in Hoya Corp on December 2, 2024 and sell it today you would lose (1,356) from holding Hoya Corp or give up 10.35% of portfolio value over 90 days.

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

Hoya Corp  vs.  CeCors Inc

Hoya Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hoya Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

CeCors Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CeCors Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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.

Pair Trading with Hoya Corp and CeCors

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

The idea behind Hoya Corp and CeCors 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..