Correlation Between Hydrotek Public and E For

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

By analyzing existing cross correlation between Hydrotek Public and E for L, you can compare the effects of market volatilities on Hydrotek Public and E For 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 Hydrotek Public with a short position of E For. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydrotek Public and E For.

Diversification Opportunities for Hydrotek Public and E For

-0.9

Correlation Coefficient

Hydrotek Public  E For

Pay attention - limited upside

The 3 months correlation between Hydrotek and EFORL is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hydrotek Public and E for L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E for L and Hydrotek Public 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 Hydrotek Public are associated (or correlated) with E For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E for L has no effect on the direction of Hydrotek Public i.e., Hydrotek Public and E For go up and down completely randomly.

Pair Corralation between Hydrotek Public and E For

Assuming the 90 days trading horizon Hydrotek Public is expected to under-perform the E For. But the stock apears to be less risky and, when comparing its historical volatility, Hydrotek Public is 10.52 times less risky than E For. The stock trades about -0.02 of its potential returns per unit of risk. The E for L is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  20.00  in E for L on October 12, 2024 and sell it today you would earn a total of  4.00  from holding E for L or generate 20.0% return on investment over 90 days.

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

Hydrotek Public  vs.  E for L

Hydrotek Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hydrotek Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

E for L

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in E for L are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, E For sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hydrotek Public and E For

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

The idea behind Hydrotek Public and E for L 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.