Correlation Between Hayward Holdings and Hubbell
Can any of the company-specific risk be diversified away by investing in both Hayward Holdings and Hubbell 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 Hayward Holdings and Hubbell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hayward Holdings and Hubbell, you can compare the effects of market volatilities on Hayward Holdings and Hubbell 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 Hayward Holdings with a short position of Hubbell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hayward Holdings and Hubbell.
Diversification Opportunities for Hayward Holdings and Hubbell
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hayward and Hubbell is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hayward Holdings and Hubbell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubbell and Hayward Holdings 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 Hayward Holdings are associated (or correlated) with Hubbell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubbell has no effect on the direction of Hayward Holdings i.e., Hayward Holdings and Hubbell go up and down completely randomly.
Pair Corralation between Hayward Holdings and Hubbell
Given the investment horizon of 90 days Hayward Holdings is expected to generate 1.15 times less return on investment than Hubbell. In addition to that, Hayward Holdings is 1.33 times more volatile than Hubbell. It trades about 0.04 of its total potential returns per unit of risk. Hubbell is currently generating about 0.07 per unit of volatility. If you would invest 32,209 in Hubbell on August 28, 2024 and sell it today you would earn a total of 14,177 from holding Hubbell or generate 44.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hayward Holdings vs. Hubbell
Performance |
| Timeline |
| Hayward Holdings |
| Hubbell |
Hayward Holdings and Hubbell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hayward Holdings and Hubbell
The main advantage of trading using opposite Hayward Holdings and Hubbell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hayward Holdings position performs unexpectedly, Hubbell 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 Hubbell will offset losses from the drop in Hubbell's long position.| Hayward Holdings vs. Kimball Electronics | Hayward Holdings vs. Enersys | Hayward Holdings vs. Espey Mfg Electronics | Hayward Holdings vs. Energizer Holdings |
| Hubbell vs. Advanced Energy Industries | Hubbell vs. Enersys | Hubbell vs. Acuity Brands | Hubbell vs. Kimball Electronics |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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