Correlation Between Hubbell and ADS TEC
Can any of the company-specific risk be diversified away by investing in both Hubbell and ADS TEC 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 Hubbell and ADS TEC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hubbell and ADS TEC ENERGY PLC, you can compare the effects of market volatilities on Hubbell and ADS TEC 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 Hubbell with a short position of ADS TEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubbell and ADS TEC.
Diversification Opportunities for Hubbell and ADS TEC
Poor diversification
The 3 months correlation between Hubbell and ADS is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hubbell and ADS TEC ENERGY PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADS TEC ENERGY and Hubbell 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 Hubbell are associated (or correlated) with ADS TEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADS TEC ENERGY has no effect on the direction of Hubbell i.e., Hubbell and ADS TEC go up and down completely randomly.
Pair Corralation between Hubbell and ADS TEC
Given the investment horizon of 90 days Hubbell is expected to generate 0.6 times more return on investment than ADS TEC. However, Hubbell is 1.67 times less risky than ADS TEC. It trades about 0.07 of its potential returns per unit of risk. ADS TEC ENERGY PLC is currently generating about -0.09 per unit of risk. If you would invest 44,967 in Hubbell on August 27, 2024 and sell it today you would earn a total of 1,419 from holding Hubbell or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubbell vs. ADS TEC ENERGY PLC
Performance |
| Timeline |
| Hubbell |
| ADS TEC ENERGY |
Hubbell and ADS TEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubbell and ADS TEC
The main advantage of trading using opposite Hubbell and ADS TEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubbell position performs unexpectedly, ADS TEC 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 ADS TEC will offset losses from the drop in ADS TEC's long position.| Hubbell vs. Advanced Energy Industries | Hubbell vs. Enersys | Hubbell vs. Acuity Brands | Hubbell vs. Kimball Electronics |
| ADS TEC vs. FREYR Battery SA | ADS TEC vs. Microvast Holdings | ADS TEC vs. Chardan NexTech Acquisition | ADS TEC vs. Solid Power |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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