Correlation Between Honeywell International and Harte Hanks

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

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

Diversification Opportunities for Honeywell International and Harte Hanks

-0.77

Correlation Coefficient

Honeywell International  Harte Hanks

Pay attention - limited upside

The 3 months correlation between Honeywell and Harte is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Honeywell International and Harte Hanks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harte Hanks and Honeywell International 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 Honeywell International are associated (or correlated) with Harte Hanks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harte Hanks has no effect on the direction of Honeywell International i.e., Honeywell International and Harte Hanks go up and down completely randomly.

Pair Corralation between Honeywell International and Harte Hanks

Considering the 90-day investment horizon Honeywell International is expected to generate 0.56 times more return on investment than Harte Hanks. However, Honeywell International is 1.79 times less risky than Harte Hanks. It trades about 0.15 of its potential returns per unit of risk. Harte Hanks is currently generating about -0.15 per unit of risk. If you would invest  20,386  in Honeywell International on August 31, 2024 and sell it today you would earn a total of  2,578  from holding Honeywell International or generate 12.65% return on investment over 90 days.

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

Honeywell International  vs.  Harte Hanks

Honeywell International

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Honeywell International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Honeywell International may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Harte Hanks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harte Hanks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Honeywell International and Harte Hanks

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

The idea behind Honeywell International and Harte Hanks 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.