Correlation Between HHG Capital and Associated Capital

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

By analyzing existing cross correlation between HHG Capital Corp and Associated Capital Group, you can compare the effects of market volatilities on HHG Capital and Associated Capital 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 HHG Capital with a short position of Associated Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of HHG Capital and Associated Capital.

Diversification Opportunities for HHG Capital and Associated Capital

-0.79

Correlation Coefficient

HHG Capital  Associated Capital

Pay attention - limited upside

The 3 months correlation between HHG and Associated is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding HHG Capital Corp and Associated Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Capital and HHG Capital 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 HHG Capital Corp are associated (or correlated) with Associated Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Capital has no effect on the direction of HHG Capital i.e., HHG Capital and Associated Capital go up and down completely randomly.

Pair Corralation between HHG Capital and Associated Capital

Assuming the 90 days horizon HHG Capital Corp is expected to generate 1.14 times more return on investment than Associated Capital. However, HHG Capital is 1.14 times more volatile than Associated Capital Group. It trades about 0.02 of its potential returns per unit of risk. Associated Capital Group is currently generating about -0.01 per unit of risk. If you would invest  1,050  in HHG Capital Corp on February 9, 2024 and sell it today you would earn a total of  90.00  from holding HHG Capital Corp or generate 8.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

HHG Capital Corp  vs.  Associated Capital Group

HHG Capital Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HHG Capital Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, HHG Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Associated Capital

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with HHG Capital and Associated Capital

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

The idea behind HHG Capital Corp and Associated Capital Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.