Correlation Between ML Capital and Honeywell International

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

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

Diversification Opportunities for ML Capital and Honeywell International

-0.72

Correlation Coefficient

ML Capital  Honeywell International

Pay attention - limited upside

The 3 months correlation between MLCG and Honeywell is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding ML Capital Group and Honeywell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honeywell International and ML Capital 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 ML Capital Group are associated (or correlated) with Honeywell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honeywell International has no effect on the direction of ML Capital i.e., ML Capital and Honeywell International go up and down completely randomly.

Pair Corralation between ML Capital and Honeywell International

If you would invest  0.01  in ML Capital Group on October 9, 2024 and sell it today you would earn a total of  0.00  from holding ML Capital Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

ML Capital Group  vs.  Honeywell International

ML Capital Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ML Capital Group 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 fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Honeywell International

Risk-Adjusted Performance

4 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Honeywell International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Honeywell International is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ML Capital and Honeywell International

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

The idea behind ML Capital Group and Honeywell International 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.