Correlation Between The9 and Hillman Solutions
Can any of the company-specific risk be diversified away by investing in both The9 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 The9 and Hillman Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The9 Ltd ADR and Hillman Solutions Corp, you can compare the effects of market volatilities on The9 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 The9 with a short position of Hillman Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of The9 and Hillman Solutions.
Diversification Opportunities for The9 and Hillman Solutions
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The9 and Hillman is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding The9 Ltd ADR 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 The9 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 The9 Ltd ADR 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 The9 i.e., The9 and Hillman Solutions go up and down completely randomly.
Pair Corralation between The9 and Hillman Solutions
Given the investment horizon of 90 days The9 Ltd ADR is expected to generate 3.73 times more return on investment than Hillman Solutions. However, The9 is 3.73 times more volatile than Hillman Solutions Corp. It trades about 0.35 of its potential returns per unit of risk. Hillman Solutions Corp is currently generating about 0.15 per unit of risk. If you would invest 855.00 in The9 Ltd ADR on August 30, 2024 and sell it today you would earn a total of 477.00 from holding The9 Ltd ADR or generate 55.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The9 Ltd ADR vs. Hillman Solutions Corp
Performance |
| Timeline |
| The9 Ltd ADR |
| Hillman Solutions Corp |
The9 and Hillman Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The9 and Hillman Solutions
The main advantage of trading using opposite The9 and Hillman Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The9 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.| The9 vs. Atari SA | The9 vs. Victory Square Technologies | The9 vs. Motorsport Gaming Us | The9 vs. Alpha Esports Tech |
| Hillman Solutions vs. Kennametal | Hillman Solutions vs. AB SKF | Hillman Solutions vs. Eastern Co | Hillman Solutions vs. Timken Company |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |