Correlation Between Hopewell Holdings and Transocean

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Can any of the company-specific risk be diversified away by investing in both Hopewell Holdings and Transocean 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 Hopewell Holdings and Transocean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hopewell Holdings Limited and Transocean, you can compare the effects of market volatilities on Hopewell Holdings and Transocean 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 Hopewell Holdings with a short position of Transocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hopewell Holdings and Transocean.

Diversification Opportunities for Hopewell Holdings and Transocean

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Hopewell and Transocean is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hopewell Holdings Limited and Transocean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transocean and Hopewell Holdings 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 Hopewell Holdings Limited are associated (or correlated) with Transocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transocean has no effect on the direction of Hopewell Holdings i.e., Hopewell Holdings and Transocean go up and down completely randomly.

Pair Corralation between Hopewell Holdings and Transocean

If you would invest  483.00  in Transocean on December 29, 2023 and sell it today you would earn a total of  142.00  from holding Transocean or generate 29.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Hopewell Holdings Limited  vs.  Transocean

 Performance 
       Timeline  
Hopewell Holdings 

Risk-Adjusted Performance

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Over the last 90 days Hopewell Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Hopewell Holdings is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Transocean 

Risk-Adjusted Performance

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High
Very Weak
Over the last 90 days Transocean has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Transocean is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Hopewell Holdings and Transocean Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hopewell Holdings and Transocean

The main advantage of trading using opposite Hopewell Holdings and Transocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hopewell Holdings position performs unexpectedly, Transocean 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 Transocean will offset losses from the drop in Transocean's long position.
The idea behind Hopewell Holdings Limited and Transocean 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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