Correlation Between Hillenbrand and JBTMarel Corp

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

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

Diversification Opportunities for Hillenbrand and JBTMarel Corp

-0.04

Correlation Coefficient

Hillenbrand  JBTMarel Corp

Good diversification

The 3 months correlation between Hillenbrand and JBTMarel is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand and JBTMarel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBTMarel Corp 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 JBTMarel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBTMarel Corp has no effect on the direction of Hillenbrand i.e., Hillenbrand and JBTMarel Corp go up and down completely randomly.

Pair Corralation between Hillenbrand and JBTMarel Corp

Allowing for the 90-day total investment horizon Hillenbrand is expected to under-perform the JBTMarel Corp. In addition to that, Hillenbrand is 1.04 times more volatile than JBTMarel Corp. It trades about -0.07 of its total potential returns per unit of risk. JBTMarel Corp is currently generating about 0.0 per unit of volatility. If you would invest  12,734  in JBTMarel Corp on December 21, 2024 and sell it today you would lose (321.00) from holding JBTMarel Corp or give up 2.52% of portfolio value over 90 days.

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

Hillenbrand  vs.  JBTMarel Corp

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.

JBTMarel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days JBTMarel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, JBTMarel Corp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hillenbrand and JBTMarel Corp

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

The idea behind Hillenbrand and JBTMarel 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.