Correlation Between REC Silicon and Hoegh Autoliners

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

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

Diversification Opportunities for REC Silicon and Hoegh Autoliners

0.33

Correlation Coefficient

REC Silicon  Hoegh Autoliners

Weak diversification

The 3 months correlation between REC and Hoegh is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding REC Silicon ASA and Hoegh Autoliners ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoegh Autoliners ASA and REC Silicon 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 REC Silicon ASA are associated (or correlated) with Hoegh Autoliners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoegh Autoliners ASA has no effect on the direction of REC Silicon i.e., REC Silicon and Hoegh Autoliners go up and down completely randomly.

Pair Corralation between REC Silicon and Hoegh Autoliners

Assuming the 90 days trading horizon REC Silicon is expected to generate 1.1 times less return on investment than Hoegh Autoliners. In addition to that, REC Silicon is 2.74 times more volatile than Hoegh Autoliners ASA. It trades about 0.09 of its total potential returns per unit of risk. Hoegh Autoliners ASA is currently generating about 0.27 per unit of volatility. If you would invest  7,013  in Hoegh Autoliners ASA on April 23, 2025 and sell it today you would earn a total of  2,832  from holding Hoegh Autoliners ASA or generate 40.38% return on investment over 90 days.

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

REC Silicon ASA  vs.  Hoegh Autoliners ASA

REC Silicon ASA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in REC Silicon ASA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, REC Silicon displayed solid returns over the last few months and may actually be approaching a breakup point.

Hoegh Autoliners ASA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hoegh Autoliners ASA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Hoegh Autoliners displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with REC Silicon and Hoegh Autoliners

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

The idea behind REC Silicon ASA and Hoegh Autoliners ASA 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.