Correlation Between Hillman Solutions and Toro

Can any of the company-specific risk be diversified away by investing in both Hillman Solutions and Toro 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 Hillman Solutions and Toro into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hillman Solutions Corp and Toro Co, you can compare the effects of market volatilities on Hillman Solutions and Toro 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 Hillman Solutions with a short position of Toro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillman Solutions and Toro.

Diversification Opportunities for Hillman Solutions and Toro

0.05

Correlation Coefficient

Hillman Solutions  Toro

Significant diversification

The 3 months correlation between Hillman and Toro is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hillman Solutions Corp and Toro Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toro and Hillman Solutions 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 Hillman Solutions Corp are associated (or correlated) with Toro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toro has no effect on the direction of Hillman Solutions i.e., Hillman Solutions and Toro go up and down completely randomly.

Pair Corralation between Hillman Solutions and Toro

Given the investment horizon of 90 days Hillman Solutions Corp is expected to generate 0.98 times more return on investment than Toro. However, Hillman Solutions Corp is 1.02 times less risky than Toro. It trades about 0.01 of its potential returns per unit of risk. Toro Co is currently generating about -0.06 per unit of risk. If you would invest  930.00  in Hillman Solutions Corp on February 22, 2024 and sell it today you would earn a total of  5.00  from holding Hillman Solutions Corp or generate 0.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hillman Solutions Corp  vs.  Toro Co

Hillman Solutions Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hillman Solutions Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Hillman Solutions is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Toro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Toro Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Toro is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hillman Solutions and Toro

The main advantage of trading using opposite Hillman Solutions and Toro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillman Solutions position performs unexpectedly, Toro 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 Toro will offset losses from the drop in Toro's long position.

The idea behind Hillman Solutions Corp and Toro Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.