Correlation Between Hawkins and NL Industries
Can any of the company-specific risk be diversified away by investing in both Hawkins and NL Industries 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 Hawkins and NL Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawkins and NL Industries, you can compare the effects of market volatilities on Hawkins and NL Industries 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 Hawkins with a short position of NL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and NL Industries.
Diversification Opportunities for Hawkins and NL Industries
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hawkins and NL Industries is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and NL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NL Industries and Hawkins 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 Hawkins are associated (or correlated) with NL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NL Industries has no effect on the direction of Hawkins i.e., Hawkins and NL Industries go up and down completely randomly.
Pair Corralation between Hawkins and NL Industries
Given the investment horizon of 90 days Hawkins is expected to generate 0.86 times more return on investment than NL Industries. However, Hawkins is 1.17 times less risky than NL Industries. It trades about 0.12 of its potential returns per unit of risk. NL Industries is currently generating about 0.04 per unit of risk. If you would invest 4,004 in Hawkins on August 28, 2024 and sell it today you would earn a total of 9,543 from holding Hawkins or generate 238.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawkins vs. NL Industries
Performance |
| Timeline |
| Hawkins |
| NL Industries |
Hawkins and NL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawkins and NL Industries
The main advantage of trading using opposite Hawkins and NL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins position performs unexpectedly, NL Industries 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 NL Industries will offset losses from the drop in NL Industries' long position.| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
| NL Industries vs. Park Electrochemical | NL Industries vs. Innovative Solutions and | NL Industries vs. Curtiss Wright | NL Industries vs. National Presto 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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