Correlation Between Hillman Solutions and Monarch Services

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

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

Diversification Opportunities for Hillman Solutions and Monarch Services

0.0

Correlation Coefficient

Hillman Solutions  Monarch Services

Pay attention - limited upside

The 3 months correlation between Hillman and Monarch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hillman Solutions Corp and Monarch Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monarch Services and Hillman Solutions 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 Hillman Solutions Corp are associated (or correlated) with Monarch Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monarch Services has no effect on the direction of Hillman Solutions i.e., Hillman Solutions and Monarch Services go up and down completely randomly.

Pair Corralation between Hillman Solutions and Monarch Services

If you would invest  1,053  in Hillman Solutions Corp on October 25, 2024 and sell it today you would lose (37.00) from holding Hillman Solutions Corp or give up 3.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.08%
Values	Daily Returns

Hillman Solutions Corp  vs.  Monarch Services

Hillman Solutions Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Monarch Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monarch Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Monarch Services is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Hillman Solutions and Monarch Services

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

The idea behind Hillman Solutions Corp and Monarch Services 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.