Correlation Between ABM Industries and Hashicorp
Can any of the company-specific risk be diversified away by investing in both ABM Industries and Hashicorp 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 ABM Industries and Hashicorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABM Industries Incorporated and Hashicorp, you can compare the effects of market volatilities on ABM Industries and Hashicorp 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 ABM Industries with a short position of Hashicorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABM Industries and Hashicorp.
Diversification Opportunities for ABM Industries and Hashicorp
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ABM and Hashicorp is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ABM Industries Incorporated and Hashicorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hashicorp and ABM Industries 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 ABM Industries Incorporated are associated (or correlated) with Hashicorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hashicorp has no effect on the direction of ABM Industries i.e., ABM Industries and Hashicorp go up and down completely randomly.
Pair Corralation between ABM Industries and Hashicorp
Considering the 90-day investment horizon ABM Industries is expected to generate 3.91 times less return on investment than Hashicorp. But when comparing it to its historical volatility, ABM Industries Incorporated is 5.13 times less risky than Hashicorp. It trades about 0.13 of its potential returns per unit of risk. Hashicorp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,693 in Hashicorp on January 25, 2024 and sell it today you would earn a total of 222.00 from holding Hashicorp or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABM Industries Incorporated vs. Hashicorp
Performance |
| Timeline |
| ABM Industries rporated |
| Hashicorp |
ABM Industries and Hashicorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABM Industries and Hashicorp
The main advantage of trading using opposite ABM Industries and Hashicorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABM Industries position performs unexpectedly, Hashicorp 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 Hashicorp will offset losses from the drop in Hashicorp's long position.| ABM Industries vs. Discount Print USA | ABM Industries vs. Cass Information Systems | ABM Industries vs. Civeo Corp | ABM Industries vs. Network 1 Technologies |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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