Correlation Between Hubbell Incorporated and TDK
Can any of the company-specific risk be diversified away by investing in both Hubbell Incorporated and TDK 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 Incorporated and TDK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hubbell Incorporated and TDK Corporation, you can compare the effects of market volatilities on Hubbell Incorporated and TDK 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 Incorporated with a short position of TDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubbell Incorporated and TDK.
Diversification Opportunities for Hubbell Incorporated and TDK
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubbell and TDK is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hubbell Incorporated and TDK Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TDK Corporation and Hubbell Incorporated 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 Incorporated are associated (or correlated) with TDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TDK Corporation has no effect on the direction of Hubbell Incorporated i.e., Hubbell Incorporated and TDK go up and down completely randomly.
Pair Corralation between Hubbell Incorporated and TDK
Assuming the 90 days trading horizon Hubbell Incorporated is expected to generate 0.7 times more return on investment than TDK. However, Hubbell Incorporated is 1.43 times less risky than TDK. It trades about -0.32 of its potential returns per unit of risk. TDK Corporation is currently generating about -0.31 per unit of risk. If you would invest 32,400 in Hubbell Incorporated on January 8, 2025 and sell it today you would lose (5,000) from holding Hubbell Incorporated or give up 15.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubbell Incorporated vs. TDK Corp.
Performance |
| Timeline |
| Hubbell Incorporated |
| TDK Corporation |
Hubbell Incorporated and TDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubbell Incorporated and TDK
The main advantage of trading using opposite Hubbell Incorporated and TDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubbell Incorporated position performs unexpectedly, TDK 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 TDK will offset losses from the drop in TDK's long position.| Hubbell Incorporated vs. Hon Hai Precision | Hubbell Incorporated vs. Samsung SDI Co | Hubbell Incorporated vs. Murata Manufacturing Co | Hubbell Incorporated vs. Corning Incorporated |
| TDK vs. Hon Hai Precision | TDK vs. Samsung SDI Co | TDK vs. Murata Manufacturing Co | TDK vs. Corning Incorporated |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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