Correlation Between Hillenbrand and Greenwave Technology

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

By analyzing existing cross correlation between Hillenbrand and Greenwave Technology Solutions, you can compare the effects of market volatilities on Hillenbrand and Greenwave Technology 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 Greenwave Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillenbrand and Greenwave Technology.

Diversification Opportunities for Hillenbrand and Greenwave Technology

-0.28

Correlation Coefficient

Hillenbrand  Greenwave Technology

Very good diversification

The 3 months correlation between Hillenbrand and Greenwave is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand and Greenwave Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenwave Technology 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 Greenwave Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenwave Technology has no effect on the direction of Hillenbrand i.e., Hillenbrand and Greenwave Technology go up and down completely randomly.

Pair Corralation between Hillenbrand and Greenwave Technology

Allowing for the 90-day total investment horizon Hillenbrand is expected to generate 0.2 times more return on investment than Greenwave Technology. However, Hillenbrand is 4.92 times less risky than Greenwave Technology. It trades about -0.02 of its potential returns per unit of risk. Greenwave Technology Solutions is currently generating about -0.06 per unit of risk. If you would invest  4,227  in Hillenbrand on December 2, 2024 and sell it today you would lose (1,237) from holding Hillenbrand or give up 29.26% of portfolio value over 90 days.

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

Hillenbrand  vs.  Greenwave Technology Solutions

Hillenbrand

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hillenbrand 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 forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Greenwave Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greenwave Technology Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile basic indicators, Greenwave Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hillenbrand and Greenwave Technology

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

The idea behind Hillenbrand and Greenwave Technology Solutions 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.