Correlation Between Hillenbrand and Fortune Brands
Can any of the company-specific risk be diversified away by investing in both Hillenbrand and Fortune Brands 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 Fortune Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hillenbrand and Fortune Brands Innovations, you can compare the effects of market volatilities on Hillenbrand and Fortune Brands 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 Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillenbrand and Fortune Brands.
Diversification Opportunities for Hillenbrand and Fortune Brands
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hillenbrand and Fortune is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand and Fortune Brands Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Innov 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 Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Innov has no effect on the direction of Hillenbrand i.e., Hillenbrand and Fortune Brands go up and down completely randomly.
Pair Corralation between Hillenbrand and Fortune Brands
Allowing for the 90-day total investment horizon Hillenbrand is expected to under-perform the Fortune Brands. In addition to that, Hillenbrand is 1.17 times more volatile than Fortune Brands Innovations. It trades about -0.02 of its total potential returns per unit of risk. Fortune Brands Innovations is currently generating about 0.05 per unit of volatility. If you would invest 5,019 in Fortune Brands Innovations on August 30, 2024 and sell it today you would earn a total of 2,778 from holding Fortune Brands Innovations or generate 55.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hillenbrand vs. Fortune Brands Innovations
Performance |
| Timeline |
| Hillenbrand |
| Fortune Brands Innov |
Hillenbrand and Fortune Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hillenbrand and Fortune Brands
The main advantage of trading using opposite Hillenbrand and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillenbrand position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.| Hillenbrand vs. IDEX Corporation | Hillenbrand vs. Watts Water Technologies | Hillenbrand vs. Donaldson | Hillenbrand vs. Gorman Rupp |
| Fortune Brands vs. Trane Technologies plc | Fortune Brands vs. Johnson Controls International | Fortune Brands vs. Lennox International | Fortune Brands vs. Builders FirstSource |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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