Correlation Between Hilton Metal and N B

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

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

Diversification Opportunities for Hilton Metal and N B

0.72

Correlation Coefficient

Hilton Metal  N B

Poor diversification

The 3 months correlation between Hilton and NBIFIN is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Metal Forging and N B I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N B I and Hilton Metal 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 Hilton Metal Forging are associated (or correlated) with N B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N B I has no effect on the direction of Hilton Metal i.e., Hilton Metal and N B go up and down completely randomly.

Pair Corralation between Hilton Metal and N B

Assuming the 90 days trading horizon Hilton Metal Forging is expected to generate 1.54 times more return on investment than N B. However, Hilton Metal is 1.54 times more volatile than N B I. It trades about -0.09 of its potential returns per unit of risk. N B I is currently generating about -0.2 per unit of risk. If you would invest  10,335  in Hilton Metal Forging on December 25, 2024 and sell it today you would lose (2,622) from holding Hilton Metal Forging or give up 25.37% of portfolio value over 90 days.

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

Hilton Metal Forging  vs.  N B I

Hilton Metal Forging

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hilton Metal Forging has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

N B I

Risk-Adjusted Performance

Very Weak

Over the last 90 days N B I has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hilton Metal and N B

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

The idea behind Hilton Metal Forging and N B I 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.