Correlation Between Hillenbrand and American Superconductor
Can any of the company-specific risk be diversified away by investing in both Hillenbrand and American Superconductor 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 Hillenbrand and American Superconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hillenbrand and American Superconductor, you can compare the effects of market volatilities on Hillenbrand and American Superconductor 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 Hillenbrand with a short position of American Superconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillenbrand and American Superconductor.
Diversification Opportunities for Hillenbrand and American Superconductor
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hillenbrand and American is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand and American Superconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Superconductor and Hillenbrand 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 Hillenbrand are associated (or correlated) with American Superconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Superconductor has no effect on the direction of Hillenbrand i.e., Hillenbrand and American Superconductor go up and down completely randomly.
Pair Corralation between Hillenbrand and American Superconductor
Allowing for the 90-day total investment horizon Hillenbrand is expected to generate 0.55 times more return on investment than American Superconductor. However, Hillenbrand is 1.8 times less risky than American Superconductor. It trades about 0.14 of its potential returns per unit of risk. American Superconductor is currently generating about -0.23 per unit of risk. If you would invest 3,017 in Hillenbrand on September 14, 2024 and sell it today you would earn a total of 282.00 from holding Hillenbrand or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hillenbrand vs. American Superconductor
Performance |
| Timeline |
| Hillenbrand |
| American Superconductor |
Hillenbrand and American Superconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hillenbrand and American Superconductor
The main advantage of trading using opposite Hillenbrand and American Superconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillenbrand position performs unexpectedly, American Superconductor 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 American Superconductor will offset losses from the drop in American Superconductor's long position.| Hillenbrand vs. IDEX Corporation | Hillenbrand vs. Watts Water Technologies | Hillenbrand vs. Donaldson | Hillenbrand vs. Gorman Rupp |
| American Superconductor vs. Barnes Group | American Superconductor vs. Babcock Wilcox Enterprises | American Superconductor vs. Crane Company | American Superconductor vs. Hillenbrand |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |