Correlation Between Hamilton Beach and Koss

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

Diversification Opportunities for Hamilton Beach and Koss

-0.54

Correlation Coefficient

Hamilton Beach  Koss

Excellent diversification

The 3 months correlation between Hamilton and Koss is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and Koss Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koss 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 Koss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koss has no effect on the direction of Hamilton Beach i.e., Hamilton Beach and Koss go up and down completely randomly.

Pair Corralation between Hamilton Beach and Koss

Considering the 90-day investment horizon Hamilton Beach Brands is expected to generate 0.75 times more return on investment than Koss. However, Hamilton Beach Brands is 1.33 times less risky than Koss. It trades about 0.08 of its potential returns per unit of risk. Koss Corporation is currently generating about -0.04 per unit of risk. If you would invest  923.00  in Hamilton Beach Brands on January 17, 2024 and sell it today you would earn a total of  1,364  from holding Hamilton Beach Brands or generate 147.78% return on investment over 90 days.

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

Hamilton Beach Brands  vs.  Koss Corp.

Hamilton Beach Brands

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Beach Brands are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, Hamilton Beach sustained solid returns over the last few months and may actually be approaching a breakup point.

Koss

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Koss Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Hamilton Beach and Koss

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

The idea behind Hamilton Beach Brands and Koss Corporation 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.