Correlation Between Ballard Power and Hillenbrand
Can any of the company-specific risk be diversified away by investing in both Ballard Power and Hillenbrand 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 Ballard Power and Hillenbrand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ballard Power Systems and Hillenbrand, you can compare the effects of market volatilities on Ballard Power and Hillenbrand 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 Ballard Power with a short position of Hillenbrand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ballard Power and Hillenbrand.
Diversification Opportunities for Ballard Power and Hillenbrand
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ballard and Hillenbrand is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ballard Power Systems and Hillenbrand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillenbrand and Ballard Power 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 Ballard Power Systems are associated (or correlated) with Hillenbrand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillenbrand has no effect on the direction of Ballard Power i.e., Ballard Power and Hillenbrand go up and down completely randomly.
Pair Corralation between Ballard Power and Hillenbrand
Given the investment horizon of 90 days Ballard Power Systems is expected to under-perform the Hillenbrand. In addition to that, Ballard Power is 1.47 times more volatile than Hillenbrand. It trades about -0.04 of its total potential returns per unit of risk. Hillenbrand is currently generating about 0.25 per unit of volatility. If you would invest 2,786 in Hillenbrand on August 31, 2024 and sell it today you would earn a total of 598.00 from holding Hillenbrand or generate 21.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ballard Power Systems vs. Hillenbrand
Performance |
| Timeline |
| Ballard Power Systems |
| Hillenbrand |
Ballard Power and Hillenbrand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ballard Power and Hillenbrand
The main advantage of trading using opposite Ballard Power and Hillenbrand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ballard Power position performs unexpectedly, Hillenbrand 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 Hillenbrand will offset losses from the drop in Hillenbrand's long position.| Ballard Power vs. Emerson Electric | Ballard Power vs. Eaton PLC | Ballard Power vs. Parker Hannifin | Ballard Power vs. Illinois Tool Works |
| Hillenbrand vs. IDEX Corporation | Hillenbrand vs. Watts Water Technologies | Hillenbrand vs. Donaldson | Hillenbrand vs. Gorman Rupp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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