Correlation Between Hamilton Beach and Nova Lifestyle
Can any of the company-specific risk be diversified away by investing in both Hamilton Beach and Nova Lifestyle 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 Nova Lifestyle 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 Nova Lifestyle I, you can compare the effects of market volatilities on Hamilton Beach and Nova Lifestyle 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 Nova Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Beach and Nova Lifestyle.
Diversification Opportunities for Hamilton Beach and Nova Lifestyle
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hamilton and Nova is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and Nova Lifestyle I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Lifestyle I 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 Nova Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Lifestyle I has no effect on the direction of Hamilton Beach i.e., Hamilton Beach and Nova Lifestyle go up and down completely randomly.
Pair Corralation between Hamilton Beach and Nova Lifestyle
Considering the 90-day investment horizon Hamilton Beach Brands is expected to generate 0.76 times more return on investment than Nova Lifestyle. However, Hamilton Beach Brands is 1.31 times less risky than Nova Lifestyle. It trades about -0.13 of its potential returns per unit of risk. Nova Lifestyle I is currently generating about -0.29 per unit of risk. If you would invest 2,917 in Hamilton Beach Brands on August 30, 2024 and sell it today you would lose (936.00) from holding Hamilton Beach Brands or give up 32.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamilton Beach Brands vs. Nova Lifestyle I
Performance |
| Timeline |
| Hamilton Beach Brands |
| Nova Lifestyle I |
Hamilton Beach and Nova Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton Beach and Nova Lifestyle
The main advantage of trading using opposite Hamilton Beach and Nova Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Beach position performs unexpectedly, Nova Lifestyle 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 Nova Lifestyle will offset losses from the drop in Nova Lifestyle'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 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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