Correlation Between Hermes Intl and Block

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hermes Intl and Block 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 Hermes Intl and Block into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hermes Intl SA and Block Inc, you can compare the effects of market volatilities on Hermes Intl and Block 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 Hermes Intl with a short position of Block. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hermes Intl and Block.

Diversification Opportunities for Hermes Intl and Block

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Hermes and Block is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hermes Intl SA and Block Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Block Inc and Hermes Intl 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 Hermes Intl SA are associated (or correlated) with Block. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Block Inc has no effect on the direction of Hermes Intl i.e., Hermes Intl and Block go up and down completely randomly.

Pair Corralation between Hermes Intl and Block

Assuming the 90 days horizon Hermes Intl SA is expected to generate 0.51 times more return on investment than Block. However, Hermes Intl SA is 1.97 times less risky than Block. It trades about 0.23 of its potential returns per unit of risk. Block Inc is currently generating about 0.07 per unit of risk. If you would invest  13,348  in Hermes Intl SA on August 28, 2022 and sell it today you would earn a total of  2,027  from holding Hermes Intl SA or generate 15.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Hermes Intl SA  vs.  Block Inc

 Performance (%) 
       Timeline  
Hermes Intl SA 
Hermes Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hermes Intl SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Hermes Intl showed solid returns over the last few months and may actually be approaching a breakup point.

Hermes Price Channel

Block Inc 
Block Performance
0 of 100
Over the last 90 days Block Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Block is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the insiders.

Block Price Channel

Hermes Intl and Block Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hermes Intl and Block

The main advantage of trading using opposite Hermes Intl and Block positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hermes Intl position performs unexpectedly, Block 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 Block will offset losses from the drop in Block's long position.
The idea behind Hermes Intl SA and Block Inc 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.
Block vs. Vmware Inc
Block vs. Synopsys
Block vs. Verisign
Block vs. Oracle Corp
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go