Correlation Between HP and Moneygram Int

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

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

Diversification Opportunities for HP and Moneygram Int

-0.75

Correlation Coefficient

HP  Moneygram Int

Pay attention - limited upside

The 3 months correlation between HP and Moneygram is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Moneygram Int in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moneygram Int and HP 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 HP Inc are associated (or correlated) with Moneygram Int. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moneygram Int has no effect on the direction of HP i.e., HP and Moneygram Int go up and down completely randomly.

Pair Corralation between HP and Moneygram Int

Considering the 90-day investment horizon HP Inc is expected to generate 1.04 times more return on investment than Moneygram Int. However, HP is 1.04 times more volatile than Moneygram Int. It trades about 0.03 of its potential returns per unit of risk. Moneygram Int is currently generating about 0.01 per unit of risk. If you would invest  2,575  in HP Inc on October 5, 2024 and sell it today you would earn a total of  672.00  from holding HP Inc or generate 26.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	20.24%
Values	Daily Returns

HP Inc  vs.  Moneygram Int

HP Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Moneygram Int

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with HP and Moneygram Int

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

The idea behind HP Inc and Moneygram Int 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.