Correlation Between Hubbell and Ilika Plc
Can any of the company-specific risk be diversified away by investing in both Hubbell and Ilika Plc 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 Ilika Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hubbell and Ilika plc, you can compare the effects of market volatilities on Hubbell and Ilika Plc 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 Ilika Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubbell and Ilika Plc.
Diversification Opportunities for Hubbell and Ilika Plc
Excellent diversification
The 3 months correlation between Hubbell and Ilika is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hubbell and Ilika plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilika plc 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 Ilika Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilika plc has no effect on the direction of Hubbell i.e., Hubbell and Ilika Plc go up and down completely randomly.
Pair Corralation between Hubbell and Ilika Plc
Given the investment horizon of 90 days Hubbell is expected to generate 0.32 times more return on investment than Ilika Plc. However, Hubbell is 3.1 times less risky than Ilika Plc. It trades about 0.09 of its potential returns per unit of risk. Ilika plc is currently generating about 0.02 per unit of risk. If you would invest 22,914 in Hubbell on September 13, 2024 and sell it today you would earn a total of 22,620 from holding Hubbell or generate 98.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubbell vs. Ilika plc
Performance |
| Timeline |
| Hubbell |
| Ilika plc |
Hubbell and Ilika Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubbell and Ilika Plc
The main advantage of trading using opposite Hubbell and Ilika Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubbell position performs unexpectedly, Ilika Plc 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 Ilika Plc will offset losses from the drop in Ilika Plc's long position.| Hubbell vs. Advanced Energy Industries | Hubbell vs. Enersys | Hubbell vs. Acuity Brands | Hubbell vs. Kimball Electronics |
| Ilika Plc vs. FREYR Battery SA | Ilika Plc vs. nVent Electric PLC | Ilika Plc vs. Hubbell | Ilika Plc vs. Advanced Energy Industries |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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