Correlation Between Hawkins and Freeport

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

By analyzing existing cross correlation between Hawkins and Freeport McMoRan 4125 percent, you can compare the effects of market volatilities on Hawkins and Freeport 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 Freeport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and Freeport.

Diversification Opportunities for Hawkins and Freeport

0.18

Correlation Coefficient

Hawkins  Freeport

Average diversification

The 3 months correlation between Hawkins and Freeport is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and Freeport McMoRan 4125 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeport McMoRan 4125 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 Freeport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeport McMoRan 4125 has no effect on the direction of Hawkins i.e., Hawkins and Freeport go up and down completely randomly.

Pair Corralation between Hawkins and Freeport

Given the investment horizon of 90 days Hawkins is expected to under-perform the Freeport. In addition to that, Hawkins is 1.9 times more volatile than Freeport McMoRan 4125 percent. It trades about -0.17 of its total potential returns per unit of risk. Freeport McMoRan 4125 percent is currently generating about -0.1 per unit of volatility. If you would invest  9,807  in Freeport McMoRan 4125 percent on October 8, 2024 and sell it today you would lose (276.00) from holding Freeport McMoRan 4125 percent or give up 2.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Hawkins  vs.  Freeport McMoRan 4125 percent

Hawkins

Risk-Adjusted Performance

0 of 100

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 very healthy forward-looking signals, Hawkins is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Freeport McMoRan 4125

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freeport McMoRan 4125 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Freeport is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hawkins and Freeport

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

The idea behind Hawkins and Freeport McMoRan 4125 percent 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.