Correlation Between Hillman Solutions and Kennametal
Can any of the company-specific risk be diversified away by investing in both Hillman Solutions and Kennametal 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 Kennametal 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 Kennametal, you can compare the effects of market volatilities on Hillman Solutions and Kennametal 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 Kennametal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillman Solutions and Kennametal.
Diversification Opportunities for Hillman Solutions and Kennametal
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hillman and Kennametal is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hillman Solutions Corp and Kennametal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kennametal 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 Kennametal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kennametal has no effect on the direction of Hillman Solutions i.e., Hillman Solutions and Kennametal go up and down completely randomly.
Pair Corralation between Hillman Solutions and Kennametal
Given the investment horizon of 90 days Hillman Solutions Corp is expected to generate 1.42 times more return on investment than Kennametal. However, Hillman Solutions is 1.42 times more volatile than Kennametal. It trades about -0.09 of its potential returns per unit of risk. Kennametal is currently generating about -0.25 per unit of risk. If you would invest 1,082 in Hillman Solutions Corp on October 20, 2024 and sell it today you would lose (82.00) from holding Hillman Solutions Corp or give up 7.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hillman Solutions Corp vs. Kennametal
Performance |
| Timeline |
| Hillman Solutions Corp |
| Kennametal |
Hillman Solutions and Kennametal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hillman Solutions and Kennametal
The main advantage of trading using opposite Hillman Solutions and Kennametal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillman Solutions position performs unexpectedly, Kennametal 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 Kennametal will offset losses from the drop in Kennametal's long position.| Hillman Solutions vs. Kennametal | Hillman Solutions vs. AB SKF | Hillman Solutions vs. Eastern Co | Hillman Solutions vs. Timken Company |
| Kennametal vs. Hillman Solutions Corp | Kennametal vs. AB SKF | Kennametal vs. Lincoln Electric Holdings | Kennametal vs. Toro 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |