Correlation Between Hp and Banco Macro

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

Diversification Opportunities for Hp and Banco Macro

-0.35
  Correlation Coefficient

Very good diversification

The 3 months correlation between Hp and Banco is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hp Inc and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA and Hp 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 Hp Inc are associated (or correlated) with Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of Hp i.e., Hp and Banco Macro go up and down completely randomly.

Pair Corralation between Hp and Banco Macro

Considering the 90-day investment horizon Hp Inc is expected to generate 0.77 times more return on investment than Banco Macro. However, Hp Inc is 1.29 times less risky than Banco Macro. It trades about 0.04 of its potential returns per unit of risk. Banco Macro SA is currently generating about 0.01 per unit of risk. If you would invest  2,237  in Hp Inc on August 29, 2022 and sell it today you would earn a total of  778.00  from holding Hp Inc or generate 34.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Hp Inc  vs.  Banco Macro SA

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

Hp Price Channel

Banco Macro SA 
Banco Performance
0 of 100
Over the last 90 days Banco Macro SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Banco Macro is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Banco Price Channel

Hp and Banco Macro Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hp and Banco Macro

The main advantage of trading using opposite Hp and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hp position performs unexpectedly, Banco Macro 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 Banco Macro will offset losses from the drop in Banco Macro's long position.
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The idea behind Hp Inc and Banco Macro SA 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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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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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