Correlation Between Hillenbrand and TOYO Co,

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

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

Diversification Opportunities for Hillenbrand and TOYO Co,

0.48

Correlation Coefficient

Hillenbrand  TOYO Co,

Very weak diversification

The 3 months correlation between Hillenbrand and TOYO is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand and TOYO Co, Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOYO Co, 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 TOYO Co,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOYO Co, has no effect on the direction of Hillenbrand i.e., Hillenbrand and TOYO Co, go up and down completely randomly.

Pair Corralation between Hillenbrand and TOYO Co,

Allowing for the 90-day total investment horizon Hillenbrand is expected to under-perform the TOYO Co,. But the stock apears to be less risky and, when comparing its historical volatility, Hillenbrand is 1.29 times less risky than TOYO Co,. The stock trades about -0.09 of its potential returns per unit of risk. The TOYO Co, Ltd is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  344.00  in TOYO Co, Ltd on December 28, 2024 and sell it today you would lose (39.00) from holding TOYO Co, Ltd or give up 11.34% of portfolio value over 90 days.

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

Hillenbrand  vs.  TOYO Co, Ltd

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.

TOYO Co,

Risk-Adjusted Performance

Very Weak

Over the last 90 days TOYO Co, Ltd 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 healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Hillenbrand and TOYO Co,

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

The idea behind Hillenbrand and TOYO Co, Ltd 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.