Correlation Between Hillenbrand and Middleby Corp
Can any of the company-specific risk be diversified away by investing in both Hillenbrand and Middleby Corp 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 Middleby Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hillenbrand and Middleby Corp, you can compare the effects of market volatilities on Hillenbrand and Middleby Corp 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 Middleby Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillenbrand and Middleby Corp.
Diversification Opportunities for Hillenbrand and Middleby Corp
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hillenbrand and Middleby is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand and Middleby Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Middleby 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 Middleby Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Middleby Corp has no effect on the direction of Hillenbrand i.e., Hillenbrand and Middleby Corp go up and down completely randomly.
Pair Corralation between Hillenbrand and Middleby Corp
Allowing for the 90-day total investment horizon Hillenbrand is expected to generate 12.39 times less return on investment than Middleby Corp. But when comparing it to its historical volatility, Hillenbrand is 1.5 times less risky than Middleby Corp. It trades about 0.04 of its potential returns per unit of risk. Middleby Corp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 13,456 in Middleby Corp on November 9, 2024 and sell it today you would earn a total of 3,255 from holding Middleby Corp or generate 24.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hillenbrand vs. Middleby Corp
Performance |
| Timeline |
| Hillenbrand |
| Middleby Corp |
Hillenbrand and Middleby Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hillenbrand and Middleby Corp
The main advantage of trading using opposite Hillenbrand and Middleby Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillenbrand position performs unexpectedly, Middleby Corp 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 Middleby Corp will offset losses from the drop in Middleby Corp's long position.| Hillenbrand vs. IDEX Corporation | Hillenbrand vs. Watts Water Technologies | Hillenbrand vs. Donaldson | Hillenbrand vs. Gorman Rupp |
| Middleby Corp vs. Enpro Industries | Middleby Corp vs. Kadant Inc | Middleby Corp vs. ITT Inc | Middleby Corp vs. Franklin Electric Co |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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