Correlation Between Nuscale Power and Hillenbrand
Can any of the company-specific risk be diversified away by investing in both Nuscale Power and Hillenbrand 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 Nuscale Power and Hillenbrand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuscale Power Corp and Hillenbrand, you can compare the effects of market volatilities on Nuscale Power and Hillenbrand 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 Nuscale Power with a short position of Hillenbrand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuscale Power and Hillenbrand.
Diversification Opportunities for Nuscale Power and Hillenbrand
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuscale and Hillenbrand is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nuscale Power Corp and Hillenbrand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillenbrand and Nuscale Power 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 Nuscale Power Corp are associated (or correlated) with Hillenbrand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillenbrand has no effect on the direction of Nuscale Power i.e., Nuscale Power and Hillenbrand go up and down completely randomly.
Pair Corralation between Nuscale Power and Hillenbrand
Considering the 90-day investment horizon Nuscale Power Corp is expected to generate 1.91 times more return on investment than Hillenbrand. However, Nuscale Power is 1.91 times more volatile than Hillenbrand. It trades about 0.22 of its potential returns per unit of risk. Hillenbrand is currently generating about 0.25 per unit of risk. If you would invest 2,080 in Nuscale Power Corp on August 31, 2024 and sell it today you would earn a total of 726.00 from holding Nuscale Power Corp or generate 34.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuscale Power Corp vs. Hillenbrand
Performance |
| Timeline |
| Nuscale Power Corp |
| Hillenbrand |
Nuscale Power and Hillenbrand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuscale Power and Hillenbrand
The main advantage of trading using opposite Nuscale Power and Hillenbrand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuscale Power position performs unexpectedly, Hillenbrand 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 Hillenbrand will offset losses from the drop in Hillenbrand's long position.| Nuscale Power vs. Cummins | Nuscale Power vs. Chart Industries | Nuscale Power vs. GE Aerospace | Nuscale Power vs. Nel ASA |
| Hillenbrand vs. IDEX Corporation | Hillenbrand vs. Watts Water Technologies | Hillenbrand vs. Donaldson | Hillenbrand vs. Gorman Rupp |
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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