Correlation Between Hawkins and 26442UAM6

Can any of the company-specific risk be diversified away by investing in both Hawkins and 26442UAM6 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 26442UAM6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hawkins and DUK 29 15 AUG 51, you can compare the effects of market volatilities on Hawkins and 26442UAM6 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 26442UAM6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and 26442UAM6.

Diversification Opportunities for Hawkins and 26442UAM6

0.6

Correlation Coefficient

Hawkins  26442UAM6

Poor diversification

The 3 months correlation between Hawkins and 26442UAM6 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and DUK 29 15 AUG 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUK 29 15 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 26442UAM6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUK 29 15 has no effect on the direction of Hawkins i.e., Hawkins and 26442UAM6 go up and down completely randomly.

Pair Corralation between Hawkins and 26442UAM6

Given the investment horizon of 90 days Hawkins is expected to under-perform the 26442UAM6. But the stock apears to be less risky and, when comparing its historical volatility, Hawkins is 1.34 times less risky than 26442UAM6. The stock trades about -0.1 of its potential returns per unit of risk. The DUK 29 15 AUG 51 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  6,115  in DUK 29 15 AUG 51 on December 25, 2024 and sell it today you would earn a total of  236.00  from holding DUK 29 15 AUG 51 or generate 3.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	61.02%
Values	Daily Returns

Hawkins  vs.  DUK 29 15 AUG 51

Hawkins

Risk-Adjusted Performance

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 conflicting performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

DUK 29 15

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DUK 29 15 AUG 51 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 26442UAM6 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hawkins and 26442UAM6

The main advantage of trading using opposite Hawkins and 26442UAM6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins position performs unexpectedly, 26442UAM6 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 26442UAM6 will offset losses from the drop in 26442UAM6's long position.

The idea behind Hawkins and DUK 29 15 AUG 51 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.