Correlation Between International Luxury and HHG Capital

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

By analyzing existing cross correlation between International Luxury Products and HHG Capital Corp, you can compare the effects of market volatilities on International Luxury and HHG Capital 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 International Luxury with a short position of HHG Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Luxury and HHG Capital.

Diversification Opportunities for International Luxury and HHG Capital

0.0

Correlation Coefficient

International Luxury  HHG Capital

Pay attention - limited upside

The 3 months correlation between International and HHG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding International Luxury Products and HHG Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HHG Capital Corp and International Luxury 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 International Luxury Products are associated (or correlated) with HHG Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HHG Capital Corp has no effect on the direction of International Luxury i.e., International Luxury and HHG Capital go up and down completely randomly.

Pair Corralation between International Luxury and HHG Capital

If you would invest  1.36  in International Luxury Products on December 5, 2024 and sell it today you would earn a total of  0.33  from holding International Luxury Products or generate 24.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

International Luxury Products  vs.  HHG Capital Corp

International Luxury

Risk-Adjusted Performance

Very Weak

Over the last 90 days International Luxury Products has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, International Luxury is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

HHG Capital Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days HHG Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, HHG Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with International Luxury and HHG Capital

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

The idea behind International Luxury Products and HHG Capital Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.