Correlation Between Hamilton Beach and GoPro
Can any of the company-specific risk be diversified away by investing in both Hamilton Beach and GoPro 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 Hamilton Beach and GoPro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamilton Beach Brands and GoPro Inc, you can compare the effects of market volatilities on Hamilton Beach and GoPro 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 Hamilton Beach with a short position of GoPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Beach and GoPro.
Diversification Opportunities for Hamilton Beach and GoPro
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hamilton and GoPro is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and GoPro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoPro Inc and Hamilton Beach 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 Hamilton Beach Brands are associated (or correlated) with GoPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoPro Inc has no effect on the direction of Hamilton Beach i.e., Hamilton Beach and GoPro go up and down completely randomly.
Pair Corralation between Hamilton Beach and GoPro
Considering the 90-day investment horizon Hamilton Beach Brands is expected to generate 1.55 times more return on investment than GoPro. However, Hamilton Beach is 1.55 times more volatile than GoPro Inc. It trades about -0.08 of its potential returns per unit of risk. GoPro Inc is currently generating about -0.44 per unit of risk. If you would invest 2,465 in Hamilton Beach Brands on January 25, 2024 and sell it today you would lose (187.00) from holding Hamilton Beach Brands or give up 7.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamilton Beach Brands vs. GoPro Inc
Performance |
| Timeline |
| Hamilton Beach Brands |
| GoPro Inc |
Hamilton Beach and GoPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton Beach and GoPro
The main advantage of trading using opposite Hamilton Beach and GoPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Beach position performs unexpectedly, GoPro 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 GoPro will offset losses from the drop in GoPro's long position.| Hamilton Beach vs. Flexsteel Industries | Hamilton Beach vs. Natuzzi SpA | Hamilton Beach vs. Crown Crafts | Hamilton Beach vs. Bassett Furniture Industries |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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