Correlation Between Crown Crafts and Hamilton Beach
Can any of the company-specific risk be diversified away by investing in both Crown Crafts and Hamilton Beach 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 Crown Crafts and Hamilton Beach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Crafts and Hamilton Beach Brands, you can compare the effects of market volatilities on Crown Crafts and Hamilton Beach 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 Crown Crafts with a short position of Hamilton Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Crafts and Hamilton Beach.
Diversification Opportunities for Crown Crafts and Hamilton Beach
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Crown and Hamilton is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Crown Crafts and Hamilton Beach Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Beach Brands and Crown Crafts 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 Crown Crafts are associated (or correlated) with Hamilton Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Beach Brands has no effect on the direction of Crown Crafts i.e., Crown Crafts and Hamilton Beach go up and down completely randomly.
Pair Corralation between Crown Crafts and Hamilton Beach
Given the investment horizon of 90 days Crown Crafts is expected to under-perform the Hamilton Beach. But the stock apears to be less risky and, when comparing its historical volatility, Crown Crafts is 2.44 times less risky than Hamilton Beach. The stock trades about -0.01 of its potential returns per unit of risk. The Hamilton Beach Brands is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,369 in Hamilton Beach Brands on August 28, 2024 and sell it today you would earn a total of 595.00 from holding Hamilton Beach Brands or generate 43.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Crafts vs. Hamilton Beach Brands
Performance |
| Timeline |
| Crown Crafts |
| Hamilton Beach Brands |
Crown Crafts and Hamilton Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Crafts and Hamilton Beach
The main advantage of trading using opposite Crown Crafts and Hamilton Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Crafts position performs unexpectedly, Hamilton Beach 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 Hamilton Beach will offset losses from the drop in Hamilton Beach's long position.| Crown Crafts vs. Bassett Furniture Industries | Crown Crafts vs. Hooker Furniture | Crown Crafts vs. Natuzzi SpA | Crown Crafts vs. Flexsteel Industries |
| Hamilton Beach vs. Bassett Furniture Industries | Hamilton Beach vs. Flexsteel Industries | Hamilton Beach vs. Natuzzi SpA | Hamilton Beach vs. La Z Boy Incorporated |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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