Correlation Between Helios Technologies and IDEX
Can any of the company-specific risk be diversified away by investing in both Helios Technologies and IDEX 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 IDEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helios Technologies and IDEX Corporation, you can compare the effects of market volatilities on Helios Technologies and IDEX 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 IDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helios Technologies and IDEX.
Diversification Opportunities for Helios Technologies and IDEX
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Helios and IDEX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Helios Technologies and IDEX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEX 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 IDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEX has no effect on the direction of Helios Technologies i.e., Helios Technologies and IDEX go up and down completely randomly.
Pair Corralation between Helios Technologies and IDEX
Given the investment horizon of 90 days Helios Technologies is expected to generate 1.08 times less return on investment than IDEX. In addition to that, Helios Technologies is 1.74 times more volatile than IDEX Corporation. It trades about 0.14 of its total potential returns per unit of risk. IDEX Corporation is currently generating about 0.26 per unit of volatility. If you would invest 20,486 in IDEX Corporation on August 24, 2024 and sell it today you would earn a total of 2,669 from holding IDEX Corporation or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helios Technologies vs. IDEX Corp.
Performance |
| Timeline |
| Helios Technologies |
| IDEX |
Helios Technologies and IDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helios Technologies and IDEX
The main advantage of trading using opposite Helios Technologies and IDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helios Technologies position performs unexpectedly, IDEX 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 IDEX will offset losses from the drop in IDEX's long position.| Helios Technologies vs. Enpro Industries | Helios Technologies vs. Omega Flex | Helios Technologies vs. Luxfer Holdings PLC | Helios Technologies vs. Hurco Companies |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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