Correlation Between Tennant and Helios Technologies
Can any of the company-specific risk be diversified away by investing in both Tennant 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 Tennant and Helios Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tennant Company and Helios Technologies, you can compare the effects of market volatilities on Tennant 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 Tennant with a short position of Helios Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tennant and Helios Technologies.
Diversification Opportunities for Tennant and Helios Technologies
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tennant and Helios is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tennant Company and Helios Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Technologies and Tennant 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 Tennant Company 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 Tennant i.e., Tennant and Helios Technologies go up and down completely randomly.
Pair Corralation between Tennant and Helios Technologies
Considering the 90-day investment horizon Tennant Company is expected to under-perform the Helios Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Tennant Company is 1.45 times less risky than Helios Technologies. The stock trades about 0.0 of its potential returns per unit of risk. The Helios Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,068 in Helios Technologies on November 9, 2024 and sell it today you would earn a total of 272.00 from holding Helios Technologies or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tennant Company vs. Helios Technologies
Performance |
| Timeline |
| Tennant Company |
| Helios Technologies |
Tennant and Helios Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tennant and Helios Technologies
The main advantage of trading using opposite Tennant and Helios Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tennant 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.| Tennant vs. Franklin Electric Co | Tennant vs. Omega Flex | Tennant vs. Luxfer Holdings PLC | Tennant vs. Kadant Inc |
| Helios Technologies vs. Enpro Industries | Helios Technologies vs. Omega Flex | Helios Technologies vs. Luxfer Holdings PLC | Helios Technologies vs. Hurco Companies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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