Correlation Between HEICO and Corteva

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

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

Diversification Opportunities for HEICO and Corteva

0.91

Correlation Coefficient

HEICO  Corteva

Almost no diversification

The 3 months correlation between HEICO and Corteva is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding HEICO and Corteva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corteva and HEICO 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 HEICO are associated (or correlated) with Corteva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corteva has no effect on the direction of HEICO i.e., HEICO and Corteva go up and down completely randomly.

Pair Corralation between HEICO and Corteva

Assuming the 90 days horizon HEICO is expected to generate 1.47 times more return on investment than Corteva. However, HEICO is 1.47 times more volatile than Corteva. It trades about 0.17 of its potential returns per unit of risk. Corteva is currently generating about 0.18 per unit of risk. If you would invest  21,702  in HEICO on April 25, 2025 and sell it today you would earn a total of  5,118  from holding HEICO or generate 23.58% return on investment over 90 days.

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

HEICO  vs.  Corteva

HEICO

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HEICO are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HEICO reported solid returns over the last few months and may actually be approaching a breakup point.

Corteva

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Corteva are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Corteva unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HEICO and Corteva

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

The idea behind HEICO and Corteva 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.