Correlation Between Hamilton Beach and Northann Corp

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

Diversification Opportunities for Hamilton Beach and Northann Corp

-0.83

Correlation Coefficient

Hamilton Beach  Northann Corp

Pay attention - limited upside

The 3 months correlation between Hamilton and Northann is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and Northann Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northann 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 Northann Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northann Corp has no effect on the direction of Hamilton Beach i.e., Hamilton Beach and Northann Corp go up and down completely randomly.

Pair Corralation between Hamilton Beach and Northann Corp

Considering the 90-day investment horizon Hamilton Beach is expected to generate 3.84 times less return on investment than Northann Corp. But when comparing it to its historical volatility, Hamilton Beach Brands is 1.79 times less risky than Northann Corp. It trades about 0.02 of its potential returns per unit of risk. Northann Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Northann Corp on September 29, 2024 and sell it today you would earn a total of  2.00  from holding Northann Corp or generate 8.33% return on investment over 90 days.

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

Hamilton Beach Brands  vs.  Northann 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.

Northann Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Northann Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental indicators, Northann Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hamilton Beach and Northann Corp

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

The idea behind Hamilton Beach Brands and Northann 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.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.