Correlation Between Hawkins and Park Electrochemical

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

Diversification Opportunities for Hawkins and Park Electrochemical

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Hawkins and Park is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and Park Electrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Electrochemical 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 Park Electrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Electrochemical has no effect on the direction of Hawkins i.e., Hawkins and Park Electrochemical go up and down completely randomly.

Pair Corralation between Hawkins and Park Electrochemical

Given the investment horizon of 90 days Hawkins is expected to under-perform the Park Electrochemical. In addition to that, Hawkins is 1.47 times more volatile than Park Electrochemical. It trades about -0.14 of its total potential returns per unit of risk. Park Electrochemical is currently generating about -0.17 per unit of volatility. If you would invest  1,538  in Park Electrochemical on September 25, 2024 and sell it today you would lose (94.50) from holding Park Electrochemical or give up 6.14% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Hawkins  vs.  Park Electrochemical

 Performance 
       Timeline  
Hawkins 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Hawkins are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward-looking signals, Hawkins may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Park Electrochemical 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Park Electrochemical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, Park Electrochemical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hawkins and Park Electrochemical Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hawkins and Park Electrochemical

The main advantage of trading using opposite Hawkins and Park Electrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins position performs unexpectedly, Park Electrochemical 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 Park Electrochemical will offset losses from the drop in Park Electrochemical's long position.
The idea behind Hawkins and Park Electrochemical 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

Other Complementary Tools

Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Transaction History
View history of all your transactions and understand their impact on performance
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like