Correlation Between Kenon Holdings and Hillman Solutions
Can any of the company-specific risk be diversified away by investing in both Kenon Holdings and Hillman Solutions 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 Kenon Holdings and Hillman Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kenon Holdings and Hillman Solutions Corp, you can compare the effects of market volatilities on Kenon Holdings and Hillman Solutions 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 Kenon Holdings with a short position of Hillman Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenon Holdings and Hillman Solutions.
Diversification Opportunities for Kenon Holdings and Hillman Solutions
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kenon and Hillman is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kenon Holdings and Hillman Solutions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillman Solutions Corp and Kenon Holdings 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 Kenon Holdings are associated (or correlated) with Hillman Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillman Solutions Corp has no effect on the direction of Kenon Holdings i.e., Kenon Holdings and Hillman Solutions go up and down completely randomly.
Pair Corralation between Kenon Holdings and Hillman Solutions
Considering the 90-day investment horizon Kenon Holdings is expected to generate 1.24 times more return on investment than Hillman Solutions. However, Kenon Holdings is 1.24 times more volatile than Hillman Solutions Corp. It trades about 0.2 of its potential returns per unit of risk. Hillman Solutions Corp is currently generating about 0.2 per unit of risk. If you would invest 2,811 in Kenon Holdings on September 4, 2024 and sell it today you would earn a total of 218.00 from holding Kenon Holdings or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kenon Holdings vs. Hillman Solutions Corp
Performance |
| Timeline |
| Kenon Holdings |
| Hillman Solutions Corp |
Kenon Holdings and Hillman Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenon Holdings and Hillman Solutions
The main advantage of trading using opposite Kenon Holdings and Hillman Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenon Holdings position performs unexpectedly, Hillman Solutions 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 Hillman Solutions will offset losses from the drop in Hillman Solutions' long position.| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
| Hillman Solutions vs. AB SKF | Hillman Solutions vs. Aquagold International | Hillman Solutions vs. Thrivent High Yield | Hillman Solutions vs. Morningstar Unconstrained Allocation |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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