Correlation Between Xometry and Hillenbrand

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

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

Diversification Opportunities for Xometry and Hillenbrand

0.64

Correlation Coefficient

Xometry  Hillenbrand

Poor diversification

The 3 months correlation between Xometry and Hillenbrand is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xometry and Hillenbrand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillenbrand and Xometry 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 Xometry 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 Xometry i.e., Xometry and Hillenbrand go up and down completely randomly.

Pair Corralation between Xometry and Hillenbrand

Given the investment horizon of 90 days Xometry is expected to under-perform the Hillenbrand. In addition to that, Xometry is 1.5 times more volatile than Hillenbrand. It trades about -0.19 of its total potential returns per unit of risk. Hillenbrand is currently generating about -0.11 per unit of volatility. If you would invest  3,049  in Hillenbrand on December 30, 2024 and sell it today you would lose (553.00) from holding Hillenbrand or give up 18.14% of portfolio value over 90 days.

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

Xometry  vs.  Hillenbrand

Xometry

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xometry has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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.

Pair Trading with Xometry and Hillenbrand

The main advantage of trading using opposite Xometry and Hillenbrand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xometry 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 Xometry 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.