Correlation Between CSW Industrials and Helios Technologies
Can any of the company-specific risk be diversified away by investing in both CSW Industrials and Helios Technologies 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 CSW Industrials and Helios Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSW Industrials and Helios Technologies, you can compare the effects of market volatilities on CSW Industrials and Helios Technologies 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 CSW Industrials with a short position of Helios Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSW Industrials and Helios Technologies.
Diversification Opportunities for CSW Industrials and Helios Technologies
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CSW and Helios is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding CSW Industrials and Helios Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Technologies and CSW Industrials 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 CSW Industrials are associated (or correlated) with Helios Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Technologies has no effect on the direction of CSW Industrials i.e., CSW Industrials and Helios Technologies go up and down completely randomly.
Pair Corralation between CSW Industrials and Helios Technologies
Given the investment horizon of 90 days CSW Industrials is expected to generate 0.54 times more return on investment than Helios Technologies. However, CSW Industrials is 1.84 times less risky than Helios Technologies. It trades about 0.35 of its potential returns per unit of risk. Helios Technologies is currently generating about 0.15 per unit of risk. If you would invest 36,705 in CSW Industrials on August 26, 2024 and sell it today you would earn a total of 5,961 from holding CSW Industrials or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSW Industrials vs. Helios Technologies
Performance |
| Timeline |
| CSW Industrials |
| Helios Technologies |
CSW Industrials and Helios Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSW Industrials and Helios Technologies
The main advantage of trading using opposite CSW Industrials and Helios Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSW Industrials position performs unexpectedly, Helios Technologies 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 Helios Technologies will offset losses from the drop in Helios Technologies' long position.| CSW Industrials vs. Enerpac Tool Group | CSW Industrials vs. Luxfer Holdings PLC | CSW Industrials vs. John Bean Technologies | CSW Industrials vs. ITT Inc |
| Helios Technologies vs. Enpro Industries | Helios Technologies vs. Omega Flex | Helios Technologies vs. Luxfer Holdings PLC | Helios Technologies vs. Hurco Companies |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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