Correlation Between Hamilton Beach and MasterBrand
Can any of the company-specific risk be diversified away by investing in both Hamilton Beach and MasterBrand 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 Hamilton Beach and MasterBrand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamilton Beach Brands and MasterBrand, you can compare the effects of market volatilities on Hamilton Beach and MasterBrand 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 Hamilton Beach with a short position of MasterBrand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Beach and MasterBrand.
Diversification Opportunities for Hamilton Beach and MasterBrand
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hamilton and MasterBrand is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and MasterBrand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MasterBrand and Hamilton Beach 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 Hamilton Beach Brands are associated (or correlated) with MasterBrand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MasterBrand has no effect on the direction of Hamilton Beach i.e., Hamilton Beach and MasterBrand go up and down completely randomly.
Pair Corralation between Hamilton Beach and MasterBrand
Considering the 90-day investment horizon Hamilton Beach Brands is expected to under-perform the MasterBrand. In addition to that, Hamilton Beach is 1.72 times more volatile than MasterBrand. It trades about -0.1 of its total potential returns per unit of risk. MasterBrand is currently generating about 0.06 per unit of volatility. If you would invest 1,553 in MasterBrand on November 2, 2024 and sell it today you would earn a total of 187.00 from holding MasterBrand or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamilton Beach Brands vs. MasterBrand
Performance |
| Timeline |
| Hamilton Beach Brands |
| MasterBrand |
Hamilton Beach and MasterBrand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton Beach and MasterBrand
The main advantage of trading using opposite Hamilton Beach and MasterBrand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Beach position performs unexpectedly, MasterBrand 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 MasterBrand will offset losses from the drop in MasterBrand's long position.| Hamilton Beach vs. Bassett Furniture Industries | Hamilton Beach vs. Flexsteel Industries | Hamilton Beach vs. Natuzzi SpA | Hamilton Beach vs. La Z Boy Incorporated |
| MasterBrand vs. Bassett Furniture Industries | MasterBrand vs. Ethan Allen Interiors | MasterBrand vs. Natuzzi SpA | MasterBrand vs. Flexsteel Industries |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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