Correlation Between Hubbell and Acuity Brands
Can any of the company-specific risk be diversified away by investing in both Hubbell and Acuity Brands 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 Acuity Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hubbell and Acuity Brands, you can compare the effects of market volatilities on Hubbell and Acuity Brands 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 Acuity Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubbell and Acuity Brands.
Diversification Opportunities for Hubbell and Acuity Brands
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubbell and Acuity is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hubbell and Acuity Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acuity Brands 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 Acuity Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acuity Brands has no effect on the direction of Hubbell i.e., Hubbell and Acuity Brands go up and down completely randomly.
Pair Corralation between Hubbell and Acuity Brands
Given the investment horizon of 90 days Hubbell is expected to generate 1.02 times more return on investment than Acuity Brands. However, Hubbell is 1.02 times more volatile than Acuity Brands. It trades about 0.08 of its potential returns per unit of risk. Acuity Brands is currently generating about 0.08 per unit of risk. If you would invest 23,926 in Hubbell on August 27, 2024 and sell it today you would earn a total of 22,155 from holding Hubbell or generate 92.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubbell vs. Acuity Brands
Performance |
| Timeline |
| Hubbell |
| Acuity Brands |
Hubbell and Acuity Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubbell and Acuity Brands
The main advantage of trading using opposite Hubbell and Acuity Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubbell position performs unexpectedly, Acuity Brands 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 Acuity Brands will offset losses from the drop in Acuity Brands' long position.| Hubbell vs. Advanced Energy Industries | Hubbell vs. Enersys | Hubbell vs. Acuity Brands | Hubbell vs. Kimball Electronics |
| Acuity Brands vs. Bloom Energy Corp | Acuity Brands vs. Eos Energy Enterprises | Acuity Brands vs. Sunrise New Energy | Acuity Brands vs. Flux Power Holdings |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| 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 |