Correlation Between HP and ABBVIE

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

By analyzing existing cross correlation between HP Inc and ABBVIE INC 445, you can compare the effects of market volatilities on HP and ABBVIE 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 ABBVIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and ABBVIE.

Diversification Opportunities for HP and ABBVIE

-0.04

Correlation Coefficient

HP  ABBVIE

Good diversification

The 3 months correlation between HP and ABBVIE is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and ABBVIE INC 445 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABBVIE INC 445 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 ABBVIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABBVIE INC 445 has no effect on the direction of HP i.e., HP and ABBVIE go up and down completely randomly.

Pair Corralation between HP and ABBVIE

Considering the 90-day investment horizon HP Inc is expected to under-perform the ABBVIE. In addition to that, HP is 1.92 times more volatile than ABBVIE INC 445. It trades about -0.14 of its total potential returns per unit of risk. ABBVIE INC 445 is currently generating about 0.08 per unit of volatility. If you would invest  8,559  in ABBVIE INC 445 on December 30, 2024 and sell it today you would earn a total of  357.00  from holding ABBVIE INC 445 or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

HP Inc  vs.  ABBVIE INC 445

HP Inc

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

ABBVIE INC 445

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ABBVIE INC 445 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ABBVIE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HP and ABBVIE

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

The idea behind HP Inc and ABBVIE INC 445 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.