Correlation Between Herald Investment and Helium One

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

By analyzing existing cross correlation between Herald Investment Trust and Helium One Global, you can compare the effects of market volatilities on Herald Investment and Helium One 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 Herald Investment with a short position of Helium One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herald Investment and Helium One.

Diversification Opportunities for Herald Investment and Helium One

-0.28

Correlation Coefficient

Herald Investment  Helium One

Very good diversification

The 3 months correlation between Herald and Helium is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Herald Investment Trust and Helium One Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helium One Global and Herald Investment 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 Herald Investment Trust are associated (or correlated) with Helium One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helium One Global has no effect on the direction of Herald Investment i.e., Herald Investment and Helium One go up and down completely randomly.

Pair Corralation between Herald Investment and Helium One

Assuming the 90 days trading horizon Herald Investment Trust is expected to generate 0.51 times more return on investment than Helium One. However, Herald Investment Trust is 1.95 times less risky than Helium One. It trades about 0.17 of its potential returns per unit of risk. Helium One Global is currently generating about -0.22 per unit of risk. If you would invest  233,000  in Herald Investment Trust on September 24, 2024 and sell it today you would earn a total of  10,000  from holding Herald Investment Trust or generate 4.29% return on investment over 90 days.

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

Herald Investment Trust  vs.  Helium One Global

Herald Investment Trust

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Herald Investment Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Herald Investment exhibited solid returns over the last few months and may actually be approaching a breakup point.

Helium One Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helium One Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Helium One is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Herald Investment and Helium One

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

The idea behind Herald Investment Trust and Helium One Global 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.