Correlation Between Richtech Robotics and Hillenbrand

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

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

Diversification Opportunities for Richtech Robotics and Hillenbrand

-0.1

Correlation Coefficient

Richtech Robotics  Hillenbrand

Good diversification

The 3 months correlation between Richtech and Hillenbrand is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Richtech Robotics Class and Hillenbrand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillenbrand and Richtech Robotics 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 Richtech Robotics Class are associated (or correlated) with Hillenbrand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillenbrand has no effect on the direction of Richtech Robotics i.e., Richtech Robotics and Hillenbrand go up and down completely randomly.

Pair Corralation between Richtech Robotics and Hillenbrand

Allowing for the 90-day total investment horizon Richtech Robotics Class is expected to generate 4.99 times more return on investment than Hillenbrand. However, Richtech Robotics is 4.99 times more volatile than Hillenbrand. It trades about 0.42 of its potential returns per unit of risk. Hillenbrand is currently generating about -0.08 per unit of risk. If you would invest  55.00  in Richtech Robotics Class on September 18, 2024 and sell it today you would earn a total of  68.00  from holding Richtech Robotics Class or generate 123.64% return on investment over 90 days.

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

Richtech Robotics Class  vs.  Hillenbrand

Richtech Robotics Class

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Richtech Robotics Class are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Richtech Robotics reported solid returns over the last few months and may actually be approaching a breakup point.

Hillenbrand

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hillenbrand are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Hillenbrand demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Richtech Robotics and Hillenbrand

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

The idea behind Richtech Robotics Class and Hillenbrand 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.