Correlation Between Hillenbrand and Blue Bird
Can any of the company-specific risk be diversified away by investing in both Hillenbrand and Blue Bird 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 Blue Bird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hillenbrand and Blue Bird Corp, you can compare the effects of market volatilities on Hillenbrand and Blue Bird 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 Blue Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillenbrand and Blue Bird.
Diversification Opportunities for Hillenbrand and Blue Bird
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hillenbrand and Blue is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand and Blue Bird Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Bird Corp 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 Blue Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Bird Corp has no effect on the direction of Hillenbrand i.e., Hillenbrand and Blue Bird go up and down completely randomly.
Pair Corralation between Hillenbrand and Blue Bird
Allowing for the 90-day total investment horizon Hillenbrand is expected to under-perform the Blue Bird. But the stock apears to be less risky and, when comparing its historical volatility, Hillenbrand is 1.26 times less risky than Blue Bird. The stock trades about -0.03 of its potential returns per unit of risk. The Blue Bird Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,450 in Blue Bird Corp on November 9, 2024 and sell it today you would earn a total of 1,273 from holding Blue Bird Corp or generate 51.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hillenbrand vs. Blue Bird Corp
Performance |
| Timeline |
| Hillenbrand |
| Blue Bird Corp |
Hillenbrand and Blue Bird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hillenbrand and Blue Bird
The main advantage of trading using opposite Hillenbrand and Blue Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillenbrand position performs unexpectedly, Blue Bird 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 Blue Bird will offset losses from the drop in Blue Bird's long position.| Hillenbrand vs. IDEX Corporation | Hillenbrand vs. Watts Water Technologies | Hillenbrand vs. Donaldson | Hillenbrand vs. Gorman Rupp |
| Blue Bird vs. AYRO Inc | Blue Bird vs. Canoo Inc | Blue Bird vs. Hyzon Motors | Blue Bird vs. Faraday Future Intelligent |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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