Correlation Between Integrated Media and Hillcrest Energy

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

By analyzing existing cross correlation between Integrated Media Technology and Hillcrest Energy Technologies, you can compare the effects of market volatilities on Integrated Media and Hillcrest Energy 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 Integrated Media with a short position of Hillcrest Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Media and Hillcrest Energy.

Diversification Opportunities for Integrated Media and Hillcrest Energy

0.14

Correlation Coefficient

Integrated Media  Hillcrest Energy

Average diversification

The 3 months correlation between Integrated and Hillcrest is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Media Technology and Hillcrest Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillcrest Energy Tec and Integrated Media 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 Integrated Media Technology are associated (or correlated) with Hillcrest Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillcrest Energy Tec has no effect on the direction of Integrated Media i.e., Integrated Media and Hillcrest Energy go up and down completely randomly.

Pair Corralation between Integrated Media and Hillcrest Energy

Given the investment horizon of 90 days Integrated Media Technology is expected to under-perform the Hillcrest Energy. In addition to that, Integrated Media is 1.08 times more volatile than Hillcrest Energy Technologies. It trades about -0.02 of its total potential returns per unit of risk. Hillcrest Energy Technologies is currently generating about 0.0 per unit of volatility. If you would invest  18.00  in Hillcrest Energy Technologies on September 3, 2024 and sell it today you would lose (4.00) from holding Hillcrest Energy Technologies or give up 22.22% of portfolio value over 90 days.

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

Integrated Media Technology  vs.  Hillcrest Energy Technologies

Integrated Media Tec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Media Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Integrated Media is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Hillcrest Energy Tec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hillcrest Energy Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Integrated Media and Hillcrest Energy

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

The idea behind Integrated Media Technology and Hillcrest Energy Technologies 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.