Correlation Between 1847 Holdings and Honeywell International

Can any of the company-specific risk be diversified away by investing in both 1847 Holdings and Honeywell International 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 1847 Holdings and Honeywell International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1847 Holdings LLC and Honeywell International, you can compare the effects of market volatilities on 1847 Holdings and Honeywell International 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 1847 Holdings with a short position of Honeywell International. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1847 Holdings and Honeywell International.

Diversification Opportunities for 1847 Holdings and Honeywell International

-0.51

Correlation Coefficient

1847 Holdings  Honeywell International

Excellent diversification

The 3 months correlation between 1847 and Honeywell is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding 1847 Holdings LLC and Honeywell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honeywell International and 1847 Holdings 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 1847 Holdings LLC are associated (or correlated) with Honeywell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honeywell International has no effect on the direction of 1847 Holdings i.e., 1847 Holdings and Honeywell International go up and down completely randomly.

Pair Corralation between 1847 Holdings and Honeywell International

Given the investment horizon of 90 days 1847 Holdings LLC is expected to generate 48.93 times more return on investment than Honeywell International. However, 1847 Holdings is 48.93 times more volatile than Honeywell International. It trades about 0.02 of its potential returns per unit of risk. Honeywell International is currently generating about 0.05 per unit of risk. If you would invest  51,550  in 1847 Holdings LLC on August 31, 2024 and sell it today you would lose (51,510) from holding 1847 Holdings LLC or give up 99.92% of portfolio value over 90 days.

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

1847 Holdings LLC  vs.  Honeywell International

1847 Holdings LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1847 Holdings LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Honeywell International

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Honeywell International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Honeywell International may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with 1847 Holdings and Honeywell International

The main advantage of trading using opposite 1847 Holdings and Honeywell International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1847 Holdings position performs unexpectedly, Honeywell International 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 Honeywell International will offset losses from the drop in Honeywell International's long position.

The idea behind 1847 Holdings LLC and Honeywell International 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.