Correlation Between HONEYWELL and Corning Incorporated

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

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

Diversification Opportunities for HONEYWELL and Corning Incorporated

-0.17

Correlation Coefficient

HONEYWELL  Corning Incorporated

Good diversification

The 3 months correlation between HONEYWELL and Corning is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding HONEYWELL INTERNATIONAL INC and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated and HONEYWELL 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 HONEYWELL INTERNATIONAL INC are associated (or correlated) with Corning Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corning Incorporated has no effect on the direction of HONEYWELL i.e., HONEYWELL and Corning Incorporated go up and down completely randomly.

Pair Corralation between HONEYWELL and Corning Incorporated

Assuming the 90 days trading horizon HONEYWELL INTERNATIONAL INC is expected to under-perform the Corning Incorporated. But the bond apears to be less risky and, when comparing its historical volatility, HONEYWELL INTERNATIONAL INC is 2.06 times less risky than Corning Incorporated. The bond trades about -0.17 of its potential returns per unit of risk. The Corning Incorporated is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  4,618  in Corning Incorporated on October 11, 2024 and sell it today you would earn a total of  155.00  from holding Corning Incorporated or generate 3.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

HONEYWELL INTERNATIONAL INC  vs.  Corning Incorporated

HONEYWELL INTERNATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HONEYWELL INTERNATIONAL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HONEYWELL INTERNATIONAL INC investors.

Corning Incorporated

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Corning Incorporated are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, Corning Incorporated is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with HONEYWELL and Corning Incorporated

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

The idea behind HONEYWELL INTERNATIONAL INC and Corning Incorporated 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.