Correlation Between Houlihan Lokey and Stonex
Can any of the company-specific risk be diversified away by investing in both Houlihan Lokey and Stonex 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 Houlihan Lokey and Stonex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Houlihan Lokey and Stonex Group, you can compare the effects of market volatilities on Houlihan Lokey and Stonex 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 Houlihan Lokey with a short position of Stonex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Houlihan Lokey and Stonex.
Diversification Opportunities for Houlihan Lokey and Stonex
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Houlihan and Stonex is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Houlihan Lokey and Stonex Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stonex Group and Houlihan Lokey 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 Houlihan Lokey are associated (or correlated) with Stonex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stonex Group has no effect on the direction of Houlihan Lokey i.e., Houlihan Lokey and Stonex go up and down completely randomly.
Pair Corralation between Houlihan Lokey and Stonex
Considering the 90-day investment horizon Houlihan Lokey is expected to generate 10.72 times less return on investment than Stonex. But when comparing it to its historical volatility, Houlihan Lokey is 1.29 times less risky than Stonex. It trades about 0.05 of its potential returns per unit of risk. Stonex Group is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 6,689 in Stonex Group on February 8, 2024 and sell it today you would earn a total of 1,000.00 from holding Stonex Group or generate 14.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Houlihan Lokey vs. Stonex Group
Performance |
Timeline |
Houlihan Lokey |
Stonex Group |
Houlihan Lokey and Stonex Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Houlihan Lokey and Stonex
The main advantage of trading using opposite Houlihan Lokey and Stonex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Houlihan Lokey position performs unexpectedly, Stonex 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 Stonex will offset losses from the drop in Stonex's long position.Houlihan Lokey vs. Lazard | Houlihan Lokey vs. PJT Partners | Houlihan Lokey vs. Moelis Co | Houlihan Lokey vs. Piper Sandler Companies |
Stonex vs. PJT Partners | Stonex vs. Houlihan Lokey | Stonex vs. Stifel Financial | Stonex vs. Evercore Partners |
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 the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |