Correlation Between Hamilton Beach and Kyocera ADR

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Can any of the company-specific risk be diversified away by investing in both Hamilton Beach and Kyocera ADR 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 Kyocera ADR 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 Kyocera ADR, you can compare the effects of market volatilities on Hamilton Beach and Kyocera ADR 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 Kyocera ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Beach and Kyocera ADR.

Diversification Opportunities for Hamilton Beach and Kyocera ADR

0.41
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Hamilton and Kyocera is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and Kyocera ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyocera ADR 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 Kyocera ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyocera ADR has no effect on the direction of Hamilton Beach i.e., Hamilton Beach and Kyocera ADR go up and down completely randomly.

Pair Corralation between Hamilton Beach and Kyocera ADR

If you would invest  1,926  in Hamilton Beach Brands on December 29, 2023 and sell it today you would earn a total of  532.00  from holding Hamilton Beach Brands or generate 27.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy4.55%
ValuesDaily Returns

Hamilton Beach Brands  vs.  Kyocera ADR

 Performance 
       Timeline  
Hamilton Beach Brands 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Beach Brands are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental drivers, Hamilton Beach sustained solid returns over the last few months and may actually be approaching a breakup point.
Kyocera ADR 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Kyocera ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Kyocera ADR is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Hamilton Beach and Kyocera ADR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hamilton Beach and Kyocera ADR

The main advantage of trading using opposite Hamilton Beach and Kyocera ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Beach position performs unexpectedly, Kyocera ADR 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 Kyocera ADR will offset losses from the drop in Kyocera ADR's long position.
The idea behind Hamilton Beach Brands and Kyocera ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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