Correlation Between Add Value and Hydratec Industries

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

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

Diversification Opportunities for Add Value and Hydratec Industries

0.24

Correlation Coefficient

Add Value  Hydratec Industries

Modest diversification

The 3 months correlation between Add and Hydratec is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Add Value Fund and Hydratec Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydratec Industries and Add Value 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 Add Value Fund are associated (or correlated) with Hydratec Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydratec Industries has no effect on the direction of Add Value i.e., Add Value and Hydratec Industries go up and down completely randomly.

Pair Corralation between Add Value and Hydratec Industries

Assuming the 90 days trading horizon Add Value Fund is expected to generate 1.61 times more return on investment than Hydratec Industries. However, Add Value is 1.61 times more volatile than Hydratec Industries NV. It trades about -0.06 of its potential returns per unit of risk. Hydratec Industries NV is currently generating about -0.17 per unit of risk. If you would invest  10,417  in Add Value Fund on May 3, 2025 and sell it today you would lose (239.00) from holding Add Value Fund or give up 2.29% of portfolio value over 90 days.

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

Add Value Fund  vs.  Hydratec Industries NV

Add Value Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Add Value Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat uncertain basic indicators, Add Value may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Hydratec Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hydratec Industries NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hydratec Industries is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Add Value and Hydratec Industries

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

The idea behind Add Value Fund and Hydratec Industries 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.