Correlation Between Hilton Metal and SIS

Can any of the company-specific risk be diversified away by investing in both Hilton Metal and SIS 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 SIS 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 SIS LIMITED, you can compare the effects of market volatilities on Hilton Metal and SIS 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 SIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Metal and SIS.

Diversification Opportunities for Hilton Metal and SIS

-0.63

Correlation Coefficient

Hilton Metal  SIS

Excellent diversification

The 3 months correlation between Hilton and SIS is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Metal Forging and SIS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIS LIMITED 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 SIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIS LIMITED has no effect on the direction of Hilton Metal i.e., Hilton Metal and SIS go up and down completely randomly.

Pair Corralation between Hilton Metal and SIS

Assuming the 90 days trading horizon Hilton Metal Forging is expected to generate 3.17 times more return on investment than SIS. However, Hilton Metal is 3.17 times more volatile than SIS LIMITED. It trades about 0.18 of its potential returns per unit of risk. SIS LIMITED is currently generating about -0.48 per unit of risk. If you would invest  9,269  in Hilton Metal Forging on October 11, 2024 and sell it today you would earn a total of  1,279  from holding Hilton Metal Forging or generate 13.8% return on investment over 90 days.

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

Hilton Metal Forging  vs.  SIS LIMITED

Hilton Metal Forging

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Metal Forging are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Hilton Metal sustained solid returns over the last few months and may actually be approaching a breakup point.

SIS LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIS LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Hilton Metal and SIS

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

The idea behind Hilton Metal Forging and SIS LIMITED 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.