Correlation Between Haynes International and ESAB Corp

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

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

Diversification Opportunities for Haynes International and ESAB Corp

0.0

Correlation Coefficient

Haynes International  ESAB Corp

Pay attention - limited upside

The 3 months correlation between Haynes and ESAB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Haynes International and ESAB Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESAB Corp and Haynes International 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 Haynes International are associated (or correlated) with ESAB Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESAB Corp has no effect on the direction of Haynes International i.e., Haynes International and ESAB Corp go up and down completely randomly.

Pair Corralation between Haynes International and ESAB Corp

If you would invest (100.00) in Haynes International on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Haynes International or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Haynes International  vs.  ESAB Corp

Haynes International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Haynes International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Haynes International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

ESAB Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days ESAB Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ESAB Corp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Haynes International and ESAB Corp

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

The idea behind Haynes International and ESAB Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.