Correlation Between Hyrican Informationssyst and American Water

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

By analyzing existing cross correlation between Hyrican Informationssysteme Aktiengesellschaft and American Water Works, you can compare the effects of market volatilities on Hyrican Informationssyst and American Water 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 Hyrican Informationssyst with a short position of American Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyrican Informationssyst and American Water.

Diversification Opportunities for Hyrican Informationssyst and American Water

-0.32

Correlation Coefficient

Hyrican Informationssyst  American Water

Very good diversification

The 3 months correlation between Hyrican and American is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hyrican Informationssysteme Ak and American Water Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Water Works and Hyrican Informationssyst 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 Hyrican Informationssysteme Aktiengesellschaft are associated (or correlated) with American Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Water Works has no effect on the direction of Hyrican Informationssyst i.e., Hyrican Informationssyst and American Water go up and down completely randomly.

Pair Corralation between Hyrican Informationssyst and American Water

If you would invest  530.00  in Hyrican Informationssysteme Aktiengesellschaft on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Hyrican Informationssysteme Aktiengesellschaft or generate 0.0% return on investment over 90 days.

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

Hyrican Informationssysteme Ak  vs.  American Water Works

Hyrican Informationssyst

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hyrican Informationssysteme Aktiengesellschaft are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hyrican Informationssyst reported solid returns over the last few months and may actually be approaching a breakup point.

American Water Works

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Water Works has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Hyrican Informationssyst and American Water

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

The idea behind Hyrican Informationssysteme Aktiengesellschaft and American Water Works 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.