Correlation Between HARDWARIO and Photon Energy

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

By analyzing existing cross correlation between HARDWARIO as and Photon Energy NV, you can compare the effects of market volatilities on HARDWARIO and Photon Energy 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 HARDWARIO with a short position of Photon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of HARDWARIO and Photon Energy.

Diversification Opportunities for HARDWARIO and Photon Energy

-0.1

Correlation Coefficient

HARDWARIO  Photon Energy

Good diversification

The 3 months correlation between HARDWARIO and Photon is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding HARDWARIO as and Photon Energy NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photon Energy NV and HARDWARIO 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 HARDWARIO as are associated (or correlated) with Photon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photon Energy NV has no effect on the direction of HARDWARIO i.e., HARDWARIO and Photon Energy go up and down completely randomly.

Pair Corralation between HARDWARIO and Photon Energy

Assuming the 90 days trading horizon HARDWARIO as is expected to generate 2.3 times more return on investment than Photon Energy. However, HARDWARIO is 2.3 times more volatile than Photon Energy NV. It trades about 0.08 of its potential returns per unit of risk. Photon Energy NV is currently generating about -0.09 per unit of risk. If you would invest  1,040  in HARDWARIO as on November 28, 2024 and sell it today you would earn a total of  170.00  from holding HARDWARIO as or generate 16.35% return on investment over 90 days.

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

HARDWARIO as  vs.  Photon Energy NV

HARDWARIO as

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HARDWARIO as are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, HARDWARIO reported solid returns over the last few months and may actually be approaching a breakup point.

Photon Energy NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Photon Energy NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak 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.

Pair Trading with HARDWARIO and Photon Energy

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

The idea behind HARDWARIO as and Photon Energy NV 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 CEOs Directory module to screen CEOs from public companies around the world.