Correlation Between Hardide PLC and Shell Plc

Can any of the company-specific risk be diversified away by investing in both Hardide PLC and Shell Plc 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 Hardide PLC and Shell Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hardide PLC and Shell plc, you can compare the effects of market volatilities on Hardide PLC and Shell Plc 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 Hardide PLC with a short position of Shell Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hardide PLC and Shell Plc.

Diversification Opportunities for Hardide PLC and Shell Plc

-0.77

Correlation Coefficient

Hardide PLC  Shell Plc

Pay attention - limited upside

The 3 months correlation between Hardide and Shell is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hardide PLC and Shell plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell plc and Hardide PLC 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 Hardide PLC are associated (or correlated) with Shell Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell plc has no effect on the direction of Hardide PLC i.e., Hardide PLC and Shell Plc go up and down completely randomly.

Pair Corralation between Hardide PLC and Shell Plc

Assuming the 90 days trading horizon Hardide PLC is expected to under-perform the Shell Plc. In addition to that, Hardide PLC is 1.15 times more volatile than Shell plc. It trades about -0.16 of its total potential returns per unit of risk. Shell plc is currently generating about 0.14 per unit of volatility. If you would invest  252,804  in Shell plc on June 29, 2025 and sell it today you would earn a total of  20,546  from holding Shell plc or generate 8.13% return on investment over 90 days.

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

Hardide PLC  vs.  Shell plc

Hardide PLC

Risk-Adjusted Performance

Weakest

Over the last 90 days Hardide PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Shell plc

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Shell plc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Shell Plc may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Hardide PLC and Shell Plc

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

The idea behind Hardide PLC and Shell plc 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.