Correlation Between Hurco Companies and CVD Equipment
Can any of the company-specific risk be diversified away by investing in both Hurco Companies and CVD Equipment 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 Hurco Companies and CVD Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurco Companies and CVD Equipment, you can compare the effects of market volatilities on Hurco Companies and CVD Equipment 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 Hurco Companies with a short position of CVD Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurco Companies and CVD Equipment.
Diversification Opportunities for Hurco Companies and CVD Equipment
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hurco and CVD is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and CVD Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVD Equipment and Hurco Companies 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 Hurco Companies are associated (or correlated) with CVD Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVD Equipment has no effect on the direction of Hurco Companies i.e., Hurco Companies and CVD Equipment go up and down completely randomly.
Pair Corralation between Hurco Companies and CVD Equipment
Given the investment horizon of 90 days Hurco Companies is expected to generate 0.33 times more return on investment than CVD Equipment. However, Hurco Companies is 3.05 times less risky than CVD Equipment. It trades about -0.1 of its potential returns per unit of risk. CVD Equipment is currently generating about -0.04 per unit of risk. If you would invest 1,982 in Hurco Companies on January 25, 2024 and sell it today you would lose (86.00) from holding Hurco Companies or give up 4.34% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hurco Companies vs. CVD Equipment
Performance |
Timeline |
Hurco Companies |
CVD Equipment |
Hurco Companies and CVD Equipment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hurco Companies and CVD Equipment
The main advantage of trading using opposite Hurco Companies and CVD Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies position performs unexpectedly, CVD Equipment 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 CVD Equipment will offset losses from the drop in CVD Equipment's long position.Hurco Companies vs. Enerpac Tool Group | Hurco Companies vs. Enpro Industries | Hurco Companies vs. Omega Flex | Hurco Companies vs. Gorman Rupp |
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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 Stocks Directory module to find actively traded stocks across global markets.
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