Correlation Between Ideanomics and HP
Can any of the company-specific risk be diversified away by investing in both Ideanomics and HP 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 Ideanomics and HP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ideanomics and HP Inc, you can compare the effects of market volatilities on Ideanomics and HP 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 Ideanomics with a short position of HP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ideanomics and HP.
Diversification Opportunities for Ideanomics and HP
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ideanomics and HP is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ideanomics and HP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HP Inc and Ideanomics 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 Ideanomics are associated (or correlated) with HP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HP Inc has no effect on the direction of Ideanomics i.e., Ideanomics and HP go up and down completely randomly.
Pair Corralation between Ideanomics and HP
Given the investment horizon of 90 days Ideanomics is expected to generate 3.82 times more return on investment than HP. However, Ideanomics is 3.82 times more volatile than HP Inc. It trades about -0.04 of its potential returns per unit of risk. HP Inc is currently generating about -0.26 per unit of risk. If you would invest 94.00 in Ideanomics on January 24, 2024 and sell it today you would lose (6.00) from holding Ideanomics or give up 6.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ideanomics vs. HP Inc
Performance |
Timeline |
Ideanomics |
HP Inc |
Ideanomics and HP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ideanomics and HP
The main advantage of trading using opposite Ideanomics and HP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ideanomics position performs unexpectedly, HP 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 HP will offset losses from the drop in HP's long position.Ideanomics vs. Deere Company | Ideanomics vs. Caterpillar | Ideanomics vs. Lion Electric Corp | Ideanomics vs. Xos Inc |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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