Correlation Between Hollysys Automation and Hayward Holdings

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

By analyzing existing cross correlation between Hollysys Automation Technologies and Hayward Holdings, you can compare the effects of market volatilities on Hollysys Automation and Hayward Holdings 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 Hollysys Automation with a short position of Hayward Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollysys Automation and Hayward Holdings.

Diversification Opportunities for Hollysys Automation and Hayward Holdings

0.0

Correlation Coefficient

Hollysys Automation  Hayward Holdings

Pay attention - limited upside

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

Pair Corralation between Hollysys Automation and Hayward Holdings

If you would invest (100.00) in Hollysys Automation Technologies on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Hollysys Automation Technologies or generate -100.0% return on investment over 90 days.

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

Hollysys Automation Technologi  vs.  Hayward Holdings

Hollysys Automation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hollysys Automation Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Hollysys Automation is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Hayward Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hayward Holdings 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 stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Hollysys Automation and Hayward Holdings

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

The idea behind Hollysys Automation Technologies and Hayward Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.