Correlation Between Hamilton Beach and Sphere 3D

Can any of the company-specific risk be diversified away by investing in both Hamilton Beach and Sphere 3D 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 Sphere 3D 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 Sphere 3D Corp, you can compare the effects of market volatilities on Hamilton Beach and Sphere 3D 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 Sphere 3D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Beach and Sphere 3D.

Diversification Opportunities for Hamilton Beach and Sphere 3D

-0.64

Correlation Coefficient

Hamilton Beach  Sphere 3D

Excellent diversification

The 3 months correlation between Hamilton and Sphere is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and Sphere 3D Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere 3D Corp 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 Sphere 3D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere 3D Corp has no effect on the direction of Hamilton Beach i.e., Hamilton Beach and Sphere 3D go up and down completely randomly.

Pair Corralation between Hamilton Beach and Sphere 3D

Considering the 90-day investment horizon Hamilton Beach is expected to generate 3.49 times less return on investment than Sphere 3D. But when comparing it to its historical volatility, Hamilton Beach Brands is 2.26 times less risky than Sphere 3D. It trades about 0.02 of its potential returns per unit of risk. Sphere 3D Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  107.00  in Sphere 3D Corp on September 28, 2024 and sell it today you would lose (9.78) from holding Sphere 3D Corp or give up 9.14% 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.  Sphere 3D Corp

Hamilton Beach Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hamilton Beach Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sphere 3D Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sphere 3D Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Sphere 3D showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hamilton Beach and Sphere 3D

The main advantage of trading using opposite Hamilton Beach and Sphere 3D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Beach position performs unexpectedly, Sphere 3D 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 Sphere 3D will offset losses from the drop in Sphere 3D's long position.

The idea behind Hamilton Beach Brands and Sphere 3D 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.