Correlation Between Hp and 3M

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hp and 3M 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 3M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hp Inc and 3M Company, you can compare the effects of market volatilities on Hp and 3M 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 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hp and 3M.

Diversification Opportunities for Hp and 3M

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Hp and 3M is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hp Inc and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company 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 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of Hp i.e., Hp and 3M go up and down completely randomly.

Pair Corralation between Hp and 3M

Considering the 90-day investment horizon Hp Inc is expected to under-perform the 3M. In addition to that, Hp is 1.15 times more volatile than 3M Company. It trades about -0.43 of its total potential returns per unit of risk. 3M Company is currently generating about -0.32 per unit of volatility. If you would invest  12,914  in 3M Company on June 27, 2022 and sell it today you would lose (1,615)  from holding 3M Company or give up 12.51% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Hp Inc  vs.  3M Company

 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 weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in October 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Hp Price Channel

3M Company 
3M Performance
0 of 100
Over the last 90 days 3M Company has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's primary indicators remain relatively steady which may send shares a bit higher in October 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

3M Price Channel

Hp and 3M Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hp and 3M

The main advantage of trading using opposite Hp and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hp position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.
Hp vs. Industrias Bachoco SA
The idea behind Hp Inc and 3M Company 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.
3M vs. BUSHVELD MINERALS LTD
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 Bond Directory module to find actively traded corporate debentures issued by US companies.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go