Correlation Between Gen Digital and Hsi Malls

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

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

Diversification Opportunities for Gen Digital and Hsi Malls

-0.38

Correlation Coefficient

Gen Digital  Hsi Malls

Very good diversification

The 3 months correlation between Gen and Hsi is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Gen Digital and Hsi Malls Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsi Malls Fundo and Gen Digital 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 Gen Digital are associated (or correlated) with Hsi Malls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsi Malls Fundo has no effect on the direction of Gen Digital i.e., Gen Digital and Hsi Malls go up and down completely randomly.

Pair Corralation between Gen Digital and Hsi Malls

Assuming the 90 days trading horizon Gen Digital is expected to under-perform the Hsi Malls. But the stock apears to be less risky and, when comparing its historical volatility, Gen Digital is 1.65 times less risky than Hsi Malls. The stock trades about -0.12 of its potential returns per unit of risk. The Hsi Malls Fundo is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  7,243  in Hsi Malls Fundo on December 21, 2024 and sell it today you would earn a total of  818.00  from holding Hsi Malls Fundo or generate 11.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Gen Digital  vs.  Hsi Malls Fundo

Gen Digital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gen Digital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Gen Digital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hsi Malls Fundo

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hsi Malls Fundo are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak primary indicators, Hsi Malls may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Gen Digital and Hsi Malls

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

The idea behind Gen Digital and Hsi Malls Fundo 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.

Check out your portfolio center.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.