Correlation Between Fossil and Hamilton Beach
Can any of the company-specific risk be diversified away by investing in both Fossil 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 Fossil and Hamilton Beach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fossil Group and Hamilton Beach Brands, you can compare the effects of market volatilities on Fossil 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 Fossil with a short position of Hamilton Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fossil and Hamilton Beach.
Diversification Opportunities for Fossil and Hamilton Beach
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fossil and Hamilton is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group 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 Fossil 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 Fossil Group 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 Fossil i.e., Fossil and Hamilton Beach go up and down completely randomly.
Pair Corralation between Fossil and Hamilton Beach
Given the investment horizon of 90 days Fossil Group is expected to under-perform the Hamilton Beach. In addition to that, Fossil is 1.68 times more volatile than Hamilton Beach Brands. It trades about -0.1 of its total potential returns per unit of risk. Hamilton Beach Brands is currently generating about 0.04 per unit of volatility. If you would invest 1,638 in Hamilton Beach Brands on November 9, 2024 and sell it today you would earn a total of 25.00 from holding Hamilton Beach Brands or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fossil Group vs. Hamilton Beach Brands
Performance |
| Timeline |
| Fossil Group |
| Hamilton Beach Brands |
Fossil and Hamilton Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fossil and Hamilton Beach
The main advantage of trading using opposite Fossil and Hamilton Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fossil 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.| Fossil vs. Lanvin Group Holdings | Fossil vs. Signet Jewelers | Fossil vs. Tapestry | Fossil vs. Capri Holdings |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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