Correlation Between HAL Trust and Holland Colours

Can any of the company-specific risk be diversified away by investing in both HAL Trust and Holland Colours 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 HAL Trust and Holland Colours into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HAL Trust and Holland Colours NV, you can compare the effects of market volatilities on HAL Trust and Holland Colours 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 HAL Trust with a short position of Holland Colours. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAL Trust and Holland Colours.

Diversification Opportunities for HAL Trust and Holland Colours

0.87

Correlation Coefficient

HAL Trust  Holland Colours

Very poor diversification

The 3 months correlation between HAL and Holland is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding HAL Trust and Holland Colours NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holland Colours NV and HAL Trust 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 HAL Trust are associated (or correlated) with Holland Colours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holland Colours NV has no effect on the direction of HAL Trust i.e., HAL Trust and Holland Colours go up and down completely randomly.

Pair Corralation between HAL Trust and Holland Colours

Assuming the 90 days trading horizon HAL Trust is expected to generate 1.19 times less return on investment than Holland Colours. But when comparing it to its historical volatility, HAL Trust is 2.87 times less risky than Holland Colours. It trades about 0.23 of its potential returns per unit of risk. Holland Colours NV is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9,050  in Holland Colours NV on April 23, 2025 and sell it today you would earn a total of  1,150  from holding Holland Colours NV or generate 12.71% return on investment over 90 days.

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

HAL Trust  vs.  Holland Colours NV

HAL Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HAL Trust are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, HAL Trust may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Holland Colours NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Holland Colours NV are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Holland Colours sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HAL Trust and Holland Colours

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

The idea behind HAL Trust and Holland Colours NV 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..