Correlation Between Balchem and HERSHEY
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By analyzing existing cross correlation between Balchem and HERSHEY 72 percent, you can compare the effects of market volatilities on Balchem and HERSHEY 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 Balchem with a short position of HERSHEY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balchem and HERSHEY.
Diversification Opportunities for Balchem and HERSHEY
Significant diversification
The 3 months correlation between Balchem and HERSHEY is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Balchem and HERSHEY 72 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HERSHEY 72 percent and Balchem 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 Balchem are associated (or correlated) with HERSHEY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HERSHEY 72 percent has no effect on the direction of Balchem i.e., Balchem and HERSHEY go up and down completely randomly.
Pair Corralation between Balchem and HERSHEY
Given the investment horizon of 90 days Balchem is expected to generate 2.98 times less return on investment than HERSHEY. But when comparing it to its historical volatility, Balchem is 1.47 times less risky than HERSHEY. It trades about 0.16 of its potential returns per unit of risk. HERSHEY 72 percent is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 10,743 in HERSHEY 72 percent on September 4, 2024 and sell it today you would earn a total of 382.00 from holding HERSHEY 72 percent or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 23.81% |
| Values | Daily Returns |
Balchem vs. HERSHEY 72 percent
Performance |
| Timeline |
| Balchem |
| HERSHEY 72 percent |
Balchem and HERSHEY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balchem and HERSHEY
The main advantage of trading using opposite Balchem and HERSHEY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balchem position performs unexpectedly, HERSHEY 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 HERSHEY will offset losses from the drop in HERSHEY's long position.| Balchem vs. Sensient Technologies | Balchem vs. Innospec | Balchem vs. Minerals Technologies | Balchem vs. Oil Dri |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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