Correlation Between 26442CAH7 and Hurco Companies

Can any of the company-specific risk be diversified away by investing in both 26442CAH7 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 26442CAH7 and Hurco Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUKE ENERGY CAROLINAS and Hurco Companies, you can compare the effects of market volatilities on 26442CAH7 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 26442CAH7 with a short position of Hurco Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26442CAH7 and Hurco Companies.

Diversification Opportunities for 26442CAH7 and Hurco Companies

0.61

Correlation Coefficient

26442CAH7  Hurco Companies

Poor diversification

The 3 months correlation between 26442CAH7 and Hurco is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DUKE ENERGY CAROLINAS and Hurco Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurco Companies and 26442CAH7 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 DUKE ENERGY CAROLINAS 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 26442CAH7 i.e., 26442CAH7 and Hurco Companies go up and down completely randomly.

Pair Corralation between 26442CAH7 and Hurco Companies

Assuming the 90 days trading horizon DUKE ENERGY CAROLINAS is expected to generate 0.45 times more return on investment than Hurco Companies. However, DUKE ENERGY CAROLINAS is 2.22 times less risky than Hurco Companies. It trades about 0.0 of its potential returns per unit of risk. Hurco Companies is currently generating about 0.0 per unit of risk. If you would invest  9,935  in DUKE ENERGY CAROLINAS on October 23, 2024 and sell it today you would lose (38.00) from holding DUKE ENERGY CAROLINAS or give up 0.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.67%
Values	Daily Returns

DUKE ENERGY CAROLINAS  vs.  Hurco Companies

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE ENERGY CAROLINAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26442CAH7 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Hurco Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hurco Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Hurco Companies is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with 26442CAH7 and Hurco Companies

The main advantage of trading using opposite 26442CAH7 and Hurco Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26442CAH7 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 DUKE ENERGY CAROLINAS 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.