Correlation Between IRobot and Hamilton Beach
Can any of the company-specific risk be diversified away by investing in both IRobot 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 IRobot and Hamilton Beach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iRobot and Hamilton Beach Brands, you can compare the effects of market volatilities on IRobot 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 IRobot with a short position of Hamilton Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRobot and Hamilton Beach.
Diversification Opportunities for IRobot and Hamilton Beach
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IRobot and Hamilton is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding iRobot 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 IRobot 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 iRobot 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 IRobot i.e., IRobot and Hamilton Beach go up and down completely randomly.
Pair Corralation between IRobot and Hamilton Beach
Given the investment horizon of 90 days iRobot is expected to under-perform the Hamilton Beach. In addition to that, IRobot is 1.33 times more volatile than Hamilton Beach Brands. It trades about -0.01 of its total potential returns per unit of risk. Hamilton Beach Brands is currently generating about 0.06 per unit of volatility. If you would invest 1,851 in Hamilton Beach Brands on February 13, 2024 and sell it today you would earn a total of 194.00 from holding Hamilton Beach Brands or generate 10.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
iRobot vs. Hamilton Beach Brands
Performance |
Timeline |
iRobot |
Hamilton Beach Brands |
IRobot and Hamilton Beach Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IRobot and Hamilton Beach
The main advantage of trading using opposite IRobot and Hamilton Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRobot 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.IRobot vs. Tempur Sealy International | IRobot vs. La Z Boy Incorporated | IRobot vs. Purple Innovation | IRobot vs. MasterBrand |
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 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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