Correlation Between Turning Point and HPX Corp

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

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

Diversification Opportunities for Turning Point and HPX Corp

0.21

Correlation Coefficient

Turning Point  HPX Corp

Modest diversification

The 3 months correlation between Turning and HPX is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and HPX Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HPX Corp and Turning Point 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 Turning Point Brands are associated (or correlated) with HPX Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HPX Corp has no effect on the direction of Turning Point i.e., Turning Point and HPX Corp go up and down completely randomly.

Pair Corralation between Turning Point and HPX Corp

If you would invest  1,725  in HPX Corp on September 28, 2024 and sell it today you would earn a total of  0.00  from holding HPX Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Turning Point Brands  vs.  HPX Corp

Turning Point Brands

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Turning Point Brands are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Turning Point sustained solid returns over the last few months and may actually be approaching a breakup point.

HPX Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HPX Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, HPX Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Turning Point and HPX Corp

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

The idea behind Turning Point Brands and HPX Corp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.