Correlation Between Hello and MKS Instruments

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

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

Diversification Opportunities for Hello and MKS Instruments

0.36

Correlation Coefficient

Hello  MKS Instruments

Weak diversification

The 3 months correlation between Hello and MKS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hello Group and MKS Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKS Instruments and Hello 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 Hello Group are associated (or correlated) with MKS Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKS Instruments has no effect on the direction of Hello i.e., Hello and MKS Instruments go up and down completely randomly.

Pair Corralation between Hello and MKS Instruments

Given the investment horizon of 90 days Hello Group is expected to generate 1.48 times more return on investment than MKS Instruments. However, Hello is 1.48 times more volatile than MKS Instruments. It trades about 0.03 of its potential returns per unit of risk. MKS Instruments is currently generating about 0.01 per unit of risk. If you would invest  449.00  in Hello Group on January 25, 2024 and sell it today you would earn a total of  123.00  from holding Hello Group or generate 27.39% return on investment over 90 days.

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

Hello Group  vs.  MKS Instruments

Hello Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hello Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Hello may actually be approaching a critical reversion point that can send shares even higher in May 2024.

MKS Instruments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MKS Instruments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, MKS Instruments is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Hello and MKS Instruments

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

The idea behind Hello Group and MKS Instruments 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.

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.