Correlation Between Jeld Wen and Hurco Companies

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

By analyzing existing cross correlation between Jeld Wen Holding and Hurco Companies, you can compare the effects of market volatilities on Jeld Wen and Hurco Companies 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 Jeld Wen with a short position of Hurco Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeld Wen and Hurco Companies.

Diversification Opportunities for Jeld Wen and Hurco Companies

-0.34

Correlation Coefficient

Jeld Wen  Hurco Companies

Very good diversification

The 3 months correlation between Jeld and Hurco is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Jeld Wen Holding and Hurco Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurco Companies and Jeld Wen 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 Jeld Wen Holding are associated (or correlated) with Hurco Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurco Companies has no effect on the direction of Jeld Wen i.e., Jeld Wen and Hurco Companies go up and down completely randomly.

Pair Corralation between Jeld Wen and Hurco Companies

Given the investment horizon of 90 days Jeld Wen Holding is expected to under-perform the Hurco Companies. In addition to that, Jeld Wen is 1.12 times more volatile than Hurco Companies. It trades about -0.26 of its total potential returns per unit of risk. Hurco Companies is currently generating about -0.15 per unit of volatility. If you would invest  2,115  in Hurco Companies on September 21, 2024 and sell it today you would lose (196.00) from holding Hurco Companies or give up 9.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Jeld Wen Holding  vs.  Hurco Companies

Jeld Wen Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jeld Wen Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Hurco Companies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hurco Companies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Hurco Companies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jeld Wen and Hurco Companies

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

The idea behind Jeld Wen Holding and Hurco Companies 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.