Correlation Between Hp and Actuant Corp

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

Diversification Opportunities for Hp and Actuant Corp

  Correlation Coefficient

Very weak diversification

The 3 months correlation between Hp and Actuant is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hp Inc and Actuant Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actuant Corp 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 Actuant Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actuant Corp has no effect on the direction of Hp i.e., Hp and Actuant Corp go up and down completely randomly.

Pair Corralation between Hp and Actuant Corp

Considering the 90-day investment horizon Hp Inc is expected to generate 1.09 times more return on investment than Actuant Corp. However, Hp is 1.09 times more volatile than Actuant Corp. It trades about 0.03 of its potential returns per unit of risk. Actuant Corp is currently generating about 0.01 per unit of risk. If you would invest  2,432  in Hp Inc on August 31, 2022 and sell it today you would earn a total of  489.00  from holding Hp Inc or generate 20.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Hp Inc  vs.  Actuant Corp

 Performance (%) 
Hp Inc 
Hp Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hp Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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

Actuant Corp 
Actuant Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Actuant Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Actuant Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Actuant Price Channel

Hp and Actuant Corp Volatility Contrast

   Predicted Return Density   

Pair Trading with Hp and Actuant Corp

The main advantage of trading using opposite Hp and Actuant Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hp position performs unexpectedly, Actuant Corp 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 Actuant Corp will offset losses from the drop in Actuant Corp's long position.
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The idea behind Hp Inc and Actuant Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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