Correlation Between Hillenbrand and First Advantage
Can any of the company-specific risk be diversified away by investing in both Hillenbrand and First Advantage 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 First Advantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hillenbrand and First Advantage Corp, you can compare the effects of market volatilities on Hillenbrand and First Advantage 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 First Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillenbrand and First Advantage.
Diversification Opportunities for Hillenbrand and First Advantage
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hillenbrand and First is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand and First Advantage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Advantage 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 First Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Advantage Corp has no effect on the direction of Hillenbrand i.e., Hillenbrand and First Advantage go up and down completely randomly.
Pair Corralation between Hillenbrand and First Advantage
Allowing for the 90-day total investment horizon Hillenbrand is expected to generate 1.39 times more return on investment than First Advantage. However, Hillenbrand is 1.39 times more volatile than First Advantage Corp. It trades about 0.24 of its potential returns per unit of risk. First Advantage Corp is currently generating about 0.14 per unit of risk. If you would invest 2,790 in Hillenbrand on August 30, 2024 and sell it today you would earn a total of 594.00 from holding Hillenbrand or generate 21.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hillenbrand vs. First Advantage Corp
Performance |
| Timeline |
| Hillenbrand |
| First Advantage Corp |
Hillenbrand and First Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hillenbrand and First Advantage
The main advantage of trading using opposite Hillenbrand and First Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillenbrand position performs unexpectedly, First Advantage 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 First Advantage will offset losses from the drop in First Advantage's long position.| Hillenbrand vs. IDEX Corporation | Hillenbrand vs. Watts Water Technologies | Hillenbrand vs. Donaldson | Hillenbrand vs. Gorman Rupp |
| First Advantage vs. Manhattan Associates | First Advantage vs. Paycom Soft | First Advantage vs. Clearwater Analytics Holdings | First Advantage vs. Procore Technologies |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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