Correlation Between Patrick Industries and Hamilton Beach
Can any of the company-specific risk be diversified away by investing in both Patrick Industries and Hamilton Beach 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 Patrick Industries and Hamilton Beach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patrick Industries and Hamilton Beach Brands, you can compare the effects of market volatilities on Patrick Industries and Hamilton Beach 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 Patrick Industries with a short position of Hamilton Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patrick Industries and Hamilton Beach.
Diversification Opportunities for Patrick Industries and Hamilton Beach
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Patrick and Hamilton is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Patrick Industries and Hamilton Beach Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Beach Brands and Patrick Industries 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 Patrick Industries are associated (or correlated) with Hamilton Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Beach Brands has no effect on the direction of Patrick Industries i.e., Patrick Industries and Hamilton Beach go up and down completely randomly.
Pair Corralation between Patrick Industries and Hamilton Beach
Given the investment horizon of 90 days Patrick Industries is expected to generate 0.67 times more return on investment than Hamilton Beach. However, Patrick Industries is 1.5 times less risky than Hamilton Beach. It trades about 0.03 of its potential returns per unit of risk. Hamilton Beach Brands is currently generating about -0.33 per unit of risk. If you would invest 13,360 in Patrick Industries on August 31, 2024 and sell it today you would earn a total of 82.00 from holding Patrick Industries or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patrick Industries vs. Hamilton Beach Brands
Performance |
| Timeline |
| Patrick Industries |
| Hamilton Beach Brands |
Patrick Industries and Hamilton Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patrick Industries and Hamilton Beach
The main advantage of trading using opposite Patrick Industries and Hamilton Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patrick Industries position performs unexpectedly, Hamilton Beach 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 Hamilton Beach will offset losses from the drop in Hamilton Beach's long position.| Patrick Industries vs. Bassett Furniture Industries | Patrick Industries vs. Ethan Allen Interiors | Patrick Industries vs. Natuzzi SpA | Patrick Industries vs. Flexsteel Industries |
| Hamilton Beach vs. Bassett Furniture Industries | Hamilton Beach vs. Flexsteel Industries | Hamilton Beach vs. Natuzzi SpA | Hamilton Beach vs. La Z Boy Incorporated |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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