Correlation Between Hamilton Beach and IRobot
Can any of the company-specific risk be diversified away by investing in both Hamilton Beach and IRobot 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 Hamilton Beach and IRobot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamilton Beach Brands and iRobot, you can compare the effects of market volatilities on Hamilton Beach and IRobot 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 Hamilton Beach with a short position of IRobot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Beach and IRobot.
Diversification Opportunities for Hamilton Beach and IRobot
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hamilton and IRobot is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and iRobot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iRobot and Hamilton Beach 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 Hamilton Beach Brands are associated (or correlated) with IRobot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iRobot has no effect on the direction of Hamilton Beach i.e., Hamilton Beach and IRobot go up and down completely randomly.
Pair Corralation between Hamilton Beach and IRobot
Considering the 90-day investment horizon Hamilton Beach Brands is expected to generate 0.77 times more return on investment than IRobot. However, Hamilton Beach Brands is 1.3 times less risky than IRobot. It trades about 0.1 of its potential returns per unit of risk. iRobot is currently generating about -0.3 per unit of risk. If you would invest 1,834 in Hamilton Beach Brands on January 24, 2024 and sell it today you would earn a total of 383.00 from holding Hamilton Beach Brands or generate 20.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamilton Beach Brands vs. iRobot
Performance |
| Timeline |
| Hamilton Beach Brands |
| iRobot |
Hamilton Beach and IRobot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton Beach and IRobot
The main advantage of trading using opposite Hamilton Beach and IRobot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Beach position performs unexpectedly, IRobot 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 IRobot will offset losses from the drop in IRobot's long position.| Hamilton Beach vs. Flexsteel Industries | Hamilton Beach vs. Natuzzi SpA | Hamilton Beach vs. Crown Crafts | Hamilton Beach vs. Bassett Furniture Industries |
| IRobot vs. Flexsteel Industries | IRobot vs. Natuzzi SpA | IRobot vs. Crown Crafts | IRobot vs. Bassett Furniture Industries |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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