Correlation Between Hurco Companies and Gates Industrial
Can any of the company-specific risk be diversified away by investing in both Hurco Companies and Gates Industrial 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 Hurco Companies and Gates Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurco Companies and Gates Industrial, you can compare the effects of market volatilities on Hurco Companies and Gates Industrial 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 Hurco Companies with a short position of Gates Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurco Companies and Gates Industrial.
Diversification Opportunities for Hurco Companies and Gates Industrial
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hurco and Gates is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and Gates Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gates Industrial and Hurco Companies 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 Hurco Companies are associated (or correlated) with Gates Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gates Industrial has no effect on the direction of Hurco Companies i.e., Hurco Companies and Gates Industrial go up and down completely randomly.
Pair Corralation between Hurco Companies and Gates Industrial
Given the investment horizon of 90 days Hurco Companies is expected to generate 1.9 times less return on investment than Gates Industrial. In addition to that, Hurco Companies is 1.35 times more volatile than Gates Industrial. It trades about 0.15 of its total potential returns per unit of risk. Gates Industrial is currently generating about 0.37 per unit of volatility. If you would invest 1,731 in Gates Industrial on September 3, 2024 and sell it today you would earn a total of 485.00 from holding Gates Industrial or generate 28.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurco Companies vs. Gates Industrial
Performance |
| Timeline |
| Hurco Companies |
| Gates Industrial |
Hurco Companies and Gates Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurco Companies and Gates Industrial
The main advantage of trading using opposite Hurco Companies and Gates Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies position performs unexpectedly, Gates Industrial 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 Gates Industrial will offset losses from the drop in Gates Industrial's long position.| Hurco Companies vs. Enerpac Tool Group | Hurco Companies vs. Enpro Industries | Hurco Companies vs. Omega Flex | Hurco Companies vs. Gorman Rupp |
| Gates Industrial vs. Crane NXT Co | Gates Industrial vs. Donaldson | Gates Industrial vs. ITT Inc | Gates Industrial vs. Franklin Electric Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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