Correlation Between HE Equipment and Mondee Holdings

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

By analyzing existing cross correlation between HE Equipment Services and Mondee Holdings, you can compare the effects of market volatilities on HE Equipment and Mondee Holdings 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 HE Equipment with a short position of Mondee Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and Mondee Holdings.

Diversification Opportunities for HE Equipment and Mondee Holdings

-0.12

Correlation Coefficient

HE Equipment  Mondee Holdings

Good diversification

The 3 months correlation between HEES and Mondee is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and Mondee Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mondee Holdings and HE Equipment 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 HE Equipment Services are associated (or correlated) with Mondee Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mondee Holdings has no effect on the direction of HE Equipment i.e., HE Equipment and Mondee Holdings go up and down completely randomly.

Pair Corralation between HE Equipment and Mondee Holdings

Given the investment horizon of 90 days HE Equipment Services is expected to under-perform the Mondee Holdings. But the stock apears to be less risky and, when comparing its historical volatility, HE Equipment Services is 1.13 times less risky than Mondee Holdings. The stock trades about -0.26 of its potential returns per unit of risk. The Mondee Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  227.00  in Mondee Holdings on February 1, 2024 and sell it today you would lose (8.00) from holding Mondee Holdings or give up 3.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

HE Equipment Services  vs.  Mondee Holdings

HE Equipment Services

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days HE Equipment Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Mondee Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mondee Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Mondee Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with HE Equipment and Mondee Holdings

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

The idea behind HE Equipment Services and Mondee Holdings 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.