Correlation Between Hawkins and American Vanguard

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hawkins and American Vanguard 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 Hawkins and American Vanguard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawkins and American Vanguard, you can compare the effects of market volatilities on Hawkins and American Vanguard 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 Hawkins with a short position of American Vanguard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and American Vanguard.

Diversification Opportunities for Hawkins and American Vanguard

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between Hawkins and American is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and American Vanguard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Vanguard and Hawkins 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 Hawkins are associated (or correlated) with American Vanguard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Vanguard has no effect on the direction of Hawkins i.e., Hawkins and American Vanguard go up and down completely randomly.

Pair Corralation between Hawkins and American Vanguard

Given the investment horizon of 90 days Hawkins is expected to under-perform the American Vanguard. But the stock apears to be less risky and, when comparing its historical volatility, Hawkins is 1.4 times less risky than American Vanguard. The stock trades about -0.28 of its potential returns per unit of risk. The American Vanguard is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  544.00  in American Vanguard on October 12, 2024 and sell it today you would lose (69.00) from holding American Vanguard or give up 12.68% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Hawkins  vs.  American Vanguard

 Performance 
       Timeline  
Hawkins 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hawkins has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's forward-looking signals remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
American Vanguard 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days American Vanguard has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, American Vanguard is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Hawkins and American Vanguard Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hawkins and American Vanguard

The main advantage of trading using opposite Hawkins and American Vanguard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins position performs unexpectedly, American Vanguard 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 American Vanguard will offset losses from the drop in American Vanguard's long position.
The idea behind Hawkins and American Vanguard 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

Other Complementary Tools

Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings