Correlation Between Redefine Properties and Hulamin

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

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

Diversification Opportunities for Redefine Properties and Hulamin

0.8

Correlation Coefficient

Redefine Properties  Hulamin

Very poor diversification

The 3 months correlation between Redefine and Hulamin is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Redefine Properties and Hulamin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hulamin and Redefine Properties 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 Redefine Properties are associated (or correlated) with Hulamin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hulamin has no effect on the direction of Redefine Properties i.e., Redefine Properties and Hulamin go up and down completely randomly.

Pair Corralation between Redefine Properties and Hulamin

Assuming the 90 days trading horizon Redefine Properties is expected to generate 1.22 times less return on investment than Hulamin. But when comparing it to its historical volatility, Redefine Properties is 1.55 times less risky than Hulamin. It trades about 0.06 of its potential returns per unit of risk. Hulamin is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  28,600  in Hulamin on September 15, 2024 and sell it today you would earn a total of  6,400  from holding Hulamin or generate 22.38% return on investment over 90 days.

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

Redefine Properties  vs.  Hulamin

Redefine Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Redefine Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Hulamin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hulamin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Redefine Properties and Hulamin

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

The idea behind Redefine Properties and Hulamin 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.