Correlation Between Hubbell and Signify NV
Can any of the company-specific risk be diversified away by investing in both Hubbell and Signify NV 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 Signify NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hubbell and Signify NV, you can compare the effects of market volatilities on Hubbell and Signify NV 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 Signify NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubbell and Signify NV.
Diversification Opportunities for Hubbell and Signify NV
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hubbell and Signify is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hubbell and Signify NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signify NV 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 Signify NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signify NV has no effect on the direction of Hubbell i.e., Hubbell and Signify NV go up and down completely randomly.
Pair Corralation between Hubbell and Signify NV
Given the investment horizon of 90 days Hubbell is expected to generate 0.4 times more return on investment than Signify NV. However, Hubbell is 2.5 times less risky than Signify NV. It trades about 0.09 of its potential returns per unit of risk. Signify NV is currently generating about 0.0 per unit of risk. If you would invest 22,492 in Hubbell on August 31, 2024 and sell it today you would earn a total of 23,517 from holding Hubbell or generate 104.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.75% |
| Values | Daily Returns |
Hubbell vs. Signify NV
Performance |
| Timeline |
| Hubbell |
| Signify NV |
Hubbell and Signify NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubbell and Signify NV
The main advantage of trading using opposite Hubbell and Signify NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubbell position performs unexpectedly, Signify NV 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 Signify NV will offset losses from the drop in Signify NV's long position.| Hubbell vs. Advanced Energy Industries | Hubbell vs. Enersys | Hubbell vs. Acuity Brands | Hubbell vs. Kimball Electronics |
| Signify NV vs. Tantalus Systems Holding | Signify NV vs. AFC Energy plc | Signify NV vs. Loop Energy | Signify NV vs. CBAK Energy Technology |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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