Correlation Between Element Solutions and H B
Can any of the company-specific risk be diversified away by investing in both Element Solutions and H B 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 Element Solutions and H B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Element Solutions and H B Fuller, you can compare the effects of market volatilities on Element Solutions and H B 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 Element Solutions with a short position of H B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Element Solutions and H B.
Diversification Opportunities for Element Solutions and H B
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Element and FUL is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Element Solutions and H B Fuller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H B Fuller and Element Solutions 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 Element Solutions are associated (or correlated) with H B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H B Fuller has no effect on the direction of Element Solutions i.e., Element Solutions and H B go up and down completely randomly.
Pair Corralation between Element Solutions and H B
Considering the 90-day investment horizon Element Solutions is expected to under-perform the H B. In addition to that, Element Solutions is 1.16 times more volatile than H B Fuller. It trades about -0.17 of its total potential returns per unit of risk. H B Fuller is currently generating about 0.07 per unit of volatility. If you would invest 7,795 in H B Fuller on February 8, 2024 and sell it today you would earn a total of 125.00 from holding H B Fuller or generate 1.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Element Solutions vs. H B Fuller
Performance |
Timeline |
Element Solutions |
H B Fuller |
Element Solutions and H B Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Element Solutions and H B
The main advantage of trading using opposite Element Solutions and H B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Element Solutions position performs unexpectedly, H B 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 H B will offset losses from the drop in H B's long position.Element Solutions vs. Ecolab Inc | Element Solutions vs. Sherwin Williams Co | Element Solutions vs. Sociedad Quimica y |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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