Correlation Between Hurco Companies and Tennant
Can any of the company-specific risk be diversified away by investing in both Hurco Companies and Tennant 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 Tennant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurco Companies and Tennant Company, you can compare the effects of market volatilities on Hurco Companies and Tennant 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 Tennant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurco Companies and Tennant.
Diversification Opportunities for Hurco Companies and Tennant
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hurco and Tennant is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and Tennant Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tennant Company 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 Tennant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tennant Company has no effect on the direction of Hurco Companies i.e., Hurco Companies and Tennant go up and down completely randomly.
Pair Corralation between Hurco Companies and Tennant
Given the investment horizon of 90 days Hurco Companies is expected to generate 2.8 times more return on investment than Tennant. However, Hurco Companies is 2.8 times more volatile than Tennant Company. It trades about 0.23 of its potential returns per unit of risk. Tennant Company is currently generating about 0.28 per unit of risk. If you would invest 1,931 in Hurco Companies on November 9, 2024 and sell it today you would earn a total of 309.00 from holding Hurco Companies or generate 16.0% 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. Tennant Company
Performance |
| Timeline |
| Hurco Companies |
| Tennant Company |
Hurco Companies and Tennant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurco Companies and Tennant
The main advantage of trading using opposite Hurco Companies and Tennant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies position performs unexpectedly, Tennant 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 Tennant will offset losses from the drop in Tennant's long position.| Hurco Companies vs. Enerpac Tool Group | Hurco Companies vs. Enpro Industries | Hurco Companies vs. Omega Flex | Hurco Companies vs. Gorman Rupp |
| Tennant vs. Franklin Electric Co | Tennant vs. Omega Flex | Tennant vs. Luxfer Holdings PLC | Tennant vs. Kadant Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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