Correlation Between Hamilton Beach and Aterian

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

Diversification Opportunities for Hamilton Beach and Aterian

-0.19

Correlation Coefficient

Hamilton Beach  Aterian

Good diversification

The 3 months correlation between Hamilton and Aterian is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and Aterian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aterian 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 Aterian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aterian has no effect on the direction of Hamilton Beach i.e., Hamilton Beach and Aterian go up and down completely randomly.

Pair Corralation between Hamilton Beach and Aterian

Considering the 90-day investment horizon Hamilton Beach Brands is expected to generate 0.47 times more return on investment than Aterian. However, Hamilton Beach Brands is 2.12 times less risky than Aterian. It trades about 0.1 of its potential returns per unit of risk. Aterian is currently generating about 0.0 per unit of risk. If you would invest  1,650  in Hamilton Beach Brands on December 28, 2024 and sell it today you would earn a total of  296.00  from holding Hamilton Beach Brands or generate 17.94% return on investment over 90 days.

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

Hamilton Beach Brands  vs.  Aterian

Hamilton Beach Brands

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Beach Brands are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Hamilton Beach sustained solid returns over the last few months and may actually be approaching a breakup point.

Aterian

Risk-Adjusted Performance

Weak

Over the last 90 days Aterian has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Aterian is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Hamilton Beach and Aterian

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

The idea behind Hamilton Beach Brands and Aterian 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.