Correlation Between Helios Technologies and Flowserve
Can any of the company-specific risk be diversified away by investing in both Helios Technologies and Flowserve 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 Helios Technologies and Flowserve into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helios Technologies and Flowserve, you can compare the effects of market volatilities on Helios Technologies and Flowserve 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 Helios Technologies with a short position of Flowserve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helios Technologies and Flowserve.
Diversification Opportunities for Helios Technologies and Flowserve
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Helios and Flowserve is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Helios Technologies and Flowserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flowserve and Helios Technologies 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 Helios Technologies are associated (or correlated) with Flowserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flowserve has no effect on the direction of Helios Technologies i.e., Helios Technologies and Flowserve go up and down completely randomly.
Pair Corralation between Helios Technologies and Flowserve
Given the investment horizon of 90 days Helios Technologies is expected to generate 1.8 times less return on investment than Flowserve. In addition to that, Helios Technologies is 1.42 times more volatile than Flowserve. It trades about 0.04 of its total potential returns per unit of risk. Flowserve is currently generating about 0.11 per unit of volatility. If you would invest 4,767 in Flowserve on September 3, 2024 and sell it today you would earn a total of 1,319 from holding Flowserve or generate 27.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helios Technologies vs. Flowserve
Performance |
| Timeline |
| Helios Technologies |
| Flowserve |
Helios Technologies and Flowserve Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helios Technologies and Flowserve
The main advantage of trading using opposite Helios Technologies and Flowserve positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helios Technologies position performs unexpectedly, Flowserve 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 Flowserve will offset losses from the drop in Flowserve's long position.| Helios Technologies vs. Enpro Industries | Helios Technologies vs. Omega Flex | Helios Technologies vs. Luxfer Holdings PLC | Helios Technologies vs. Hurco Companies |
| Flowserve vs. IDEX Corporation | Flowserve vs. Donaldson | Flowserve vs. Ingersoll Rand | Flowserve 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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