Correlation Between CHAR Technologies and Hill Street

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

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

Diversification Opportunities for CHAR Technologies and Hill Street

-0.18

Correlation Coefficient

CHAR Technologies  Hill Street

Good diversification

The 3 months correlation between CHAR and Hill is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding CHAR Technologies and Hill Street Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hill Street Beverage and CHAR Technologies 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 CHAR Technologies are associated (or correlated) with Hill Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hill Street Beverage has no effect on the direction of CHAR Technologies i.e., CHAR Technologies and Hill Street go up and down completely randomly.

Pair Corralation between CHAR Technologies and Hill Street

Assuming the 90 days horizon CHAR Technologies is expected to generate 1.24 times more return on investment than Hill Street. However, CHAR Technologies is 1.24 times more volatile than Hill Street Beverage. It trades about 0.06 of its potential returns per unit of risk. Hill Street Beverage is currently generating about -0.01 per unit of risk. If you would invest  22.00  in CHAR Technologies on April 25, 2025 and sell it today you would earn a total of  3.00  from holding CHAR Technologies or generate 13.64% return on investment over 90 days.

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

CHAR Technologies  vs.  Hill Street Beverage

CHAR Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CHAR Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CHAR Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Hill Street Beverage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hill Street Beverage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Hill Street is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with CHAR Technologies and Hill Street

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

The idea behind CHAR Technologies and Hill Street Beverage 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.