Correlation Between John Bean and Helios Technologies
Can any of the company-specific risk be diversified away by investing in both John Bean and Helios Technologies 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 John Bean and Helios Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Bean Technologies and Helios Technologies, you can compare the effects of market volatilities on John Bean and Helios Technologies 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 John Bean with a short position of Helios Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Bean and Helios Technologies.
Diversification Opportunities for John Bean and Helios Technologies
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between John and Helios is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding John Bean Technologies and Helios Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Technologies and John Bean 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 John Bean Technologies are associated (or correlated) with Helios Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Technologies has no effect on the direction of John Bean i.e., John Bean and Helios Technologies go up and down completely randomly.
Pair Corralation between John Bean and Helios Technologies
Considering the 90-day investment horizon John Bean Technologies is expected to generate 0.88 times more return on investment than Helios Technologies. However, John Bean Technologies is 1.13 times less risky than Helios Technologies. It trades about 0.03 of its potential returns per unit of risk. Helios Technologies is currently generating about 0.01 per unit of risk. If you would invest 9,232 in John Bean Technologies on August 23, 2024 and sell it today you would earn a total of 2,686 from holding John Bean Technologies or generate 29.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
John Bean Technologies vs. Helios Technologies
Performance |
| Timeline |
| John Bean Technologies |
| Helios Technologies |
John Bean and Helios Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Bean and Helios Technologies
The main advantage of trading using opposite John Bean and Helios Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Bean position performs unexpectedly, Helios Technologies 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 Helios Technologies will offset losses from the drop in Helios Technologies' long position.| John Bean vs. Small Cap Core | John Bean vs. Freedom Holding Corp | John Bean vs. Gfl Environmental Holdings | John Bean vs. Growth Fund Of |
| Helios Technologies vs. Illinois Tool Works | Helios Technologies vs. Pentair PLC | Helios Technologies vs. Emerson Electric | Helios Technologies vs. Smith AO |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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