Correlation Between Hillenbrand and Fanuc

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

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

Diversification Opportunities for Hillenbrand and Fanuc

0.0

Correlation Coefficient

Hillenbrand  Fanuc

Pay attention - limited upside

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

Pair Corralation between Hillenbrand and Fanuc

Allowing for the 90-day total investment horizon Hillenbrand is expected to generate 1.77 times more return on investment than Fanuc. However, Hillenbrand is 1.77 times more volatile than Fanuc. It trades about 0.06 of its potential returns per unit of risk. Fanuc is currently generating about -0.06 per unit of risk. If you would invest  3,091  in Hillenbrand on August 31, 2024 and sell it today you would earn a total of  293.00  from holding Hillenbrand or generate 9.48% return on investment over 90 days.

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

Hillenbrand  vs.  Fanuc

Hillenbrand

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hillenbrand are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Hillenbrand may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Fanuc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fanuc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Hillenbrand and Fanuc

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

The idea behind Hillenbrand and Fanuc 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.