Correlation Between Hillman Solutions and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Hillman Solutions and Biglari Holdings 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 Hillman Solutions and Biglari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hillman Solutions Corp and Biglari Holdings, you can compare the effects of market volatilities on Hillman Solutions and Biglari Holdings 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 Hillman Solutions with a short position of Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillman Solutions and Biglari Holdings.
Diversification Opportunities for Hillman Solutions and Biglari Holdings
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hillman and Biglari is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hillman Solutions Corp and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and Hillman Solutions 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 Hillman Solutions Corp are associated (or correlated) with Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Hillman Solutions i.e., Hillman Solutions and Biglari Holdings go up and down completely randomly.
Pair Corralation between Hillman Solutions and Biglari Holdings
Given the investment horizon of 90 days Hillman Solutions is expected to generate 2.33 times less return on investment than Biglari Holdings. But when comparing it to its historical volatility, Hillman Solutions Corp is 1.03 times less risky than Biglari Holdings. It trades about 0.02 of its potential returns per unit of risk. Biglari Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 16,934 in Biglari Holdings on November 2, 2024 and sell it today you would earn a total of 6,631 from holding Biglari Holdings or generate 39.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hillman Solutions Corp vs. Biglari Holdings
Performance |
| Timeline |
| Hillman Solutions Corp |
| Biglari Holdings |
Hillman Solutions and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hillman Solutions and Biglari Holdings
The main advantage of trading using opposite Hillman Solutions and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillman Solutions position performs unexpectedly, Biglari Holdings 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.| Hillman Solutions vs. Kennametal | Hillman Solutions vs. AB SKF | Hillman Solutions vs. Eastern Co | Hillman Solutions vs. Timken Company |
| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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