Correlation Between Haynes International and Constellium
Can any of the company-specific risk be diversified away by investing in both Haynes International and Constellium 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 Haynes International and Constellium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haynes International and Constellium Nv, you can compare the effects of market volatilities on Haynes International and Constellium 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 Haynes International with a short position of Constellium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haynes International and Constellium.
Diversification Opportunities for Haynes International and Constellium
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Haynes and Constellium is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Haynes International and Constellium Nv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellium Nv and Haynes International 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 Haynes International are associated (or correlated) with Constellium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellium Nv has no effect on the direction of Haynes International i.e., Haynes International and Constellium go up and down completely randomly.
Pair Corralation between Haynes International and Constellium
Given the investment horizon of 90 days Haynes International is expected to generate 0.88 times more return on investment than Constellium. However, Haynes International is 1.14 times less risky than Constellium. It trades about 0.05 of its potential returns per unit of risk. Constellium Nv is currently generating about 0.03 per unit of risk. If you would invest 3,819 in Haynes International on January 24, 2024 and sell it today you would earn a total of 2,188 from holding Haynes International or generate 57.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haynes International vs. Constellium Nv
Performance |
| Timeline |
| Haynes International |
| Constellium Nv |
Haynes International and Constellium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haynes International and Constellium
The main advantage of trading using opposite Haynes International and Constellium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haynes International position performs unexpectedly, Constellium 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 Constellium will offset losses from the drop in Constellium's long position.| Haynes International vs. Northwest Pipe | Haynes International vs. Insteel Industries | Haynes International vs. ESAB Corp | Haynes International vs. Gulf Island Fabrication |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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