Correlation Between HP and Evergold Corp

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

By analyzing existing cross correlation between HP Inc and Evergold Corp, you can compare the effects of market volatilities on HP and Evergold Corp 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 HP with a short position of Evergold Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Evergold Corp.

Diversification Opportunities for HP and Evergold Corp

-0.02

Correlation Coefficient

HP  Evergold Corp

Good diversification

The 3 months correlation between HP and Evergold is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Evergold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergold Corp and HP 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 HP Inc are associated (or correlated) with Evergold Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergold Corp has no effect on the direction of HP i.e., HP and Evergold Corp go up and down completely randomly.

Pair Corralation between HP and Evergold Corp

Considering the 90-day investment horizon HP Inc is expected to under-perform the Evergold Corp. But the stock apears to be less risky and, when comparing its historical volatility, HP Inc is 16.53 times less risky than Evergold Corp. The stock trades about -0.01 of its potential returns per unit of risk. The Evergold Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1.80  in Evergold Corp on May 7, 2025 and sell it today you would lose (0.20) from holding Evergold Corp or give up 11.11% of portfolio value over 90 days.

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

HP Inc  vs.  Evergold Corp

HP Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days HP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, HP is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Evergold Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Evergold Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Evergold Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HP and Evergold Corp

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

The idea behind HP Inc and Evergold Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.