This module allows you to analyze existing cross correlation between HCP and VMware. You can compare the effects of market volatilities on HCP and VMware 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 HCP with a short position of VMware. See also your portfolio center. Please also check ongoing floating volatility patterns of HCP and VMware.
Considering 30-days investment horizon, HCP is expected to generate 1.0 times more return on investment than VMware. However, HCP is 1.0 times more volatile than VMware. It trades about 0.19 of its potential returns per unit of risk. VMware is currently generating about 0.05 per unit of risk. If you would invest 2,192 in HCP on April 23, 2018 and sell it today you would earn a total of 118.00 from holding HCP or generate 5.38% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding HCP Inc and VMware Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on VMware and HCP 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 HCP are associated (or correlated) with VMware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VMware has no effect on the direction of HCP i.e. HCP and VMware go up and down completely randomly.
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