Correlation Between Helios Technologies and Kadant
Can any of the company-specific risk be diversified away by investing in both Helios Technologies and Kadant 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 Kadant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helios Technologies and Kadant Inc, you can compare the effects of market volatilities on Helios Technologies and Kadant 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 Kadant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helios Technologies and Kadant.
Diversification Opportunities for Helios Technologies and Kadant
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Helios and Kadant is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Helios Technologies and Kadant Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kadant Inc 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 Kadant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kadant Inc has no effect on the direction of Helios Technologies i.e., Helios Technologies and Kadant go up and down completely randomly.
Pair Corralation between Helios Technologies and Kadant
Given the investment horizon of 90 days Helios Technologies is expected to generate 2.33 times less return on investment than Kadant. In addition to that, Helios Technologies is 1.68 times more volatile than Kadant Inc. It trades about 0.15 of its total potential returns per unit of risk. Kadant Inc is currently generating about 0.58 per unit of volatility. If you would invest 31,645 in Kadant Inc on August 26, 2024 and sell it today you would earn a total of 10,256 from holding Kadant Inc or generate 32.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helios Technologies vs. Kadant Inc
Performance |
| Timeline |
| Helios Technologies |
| Kadant Inc |
Helios Technologies and Kadant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helios Technologies and Kadant
The main advantage of trading using opposite Helios Technologies and Kadant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helios Technologies position performs unexpectedly, Kadant 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 Kadant will offset losses from the drop in Kadant'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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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