Correlation Between Intevac and Hillenbrand

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

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

Diversification Opportunities for Intevac and Hillenbrand

-0.61

Correlation Coefficient

Intevac  Hillenbrand

Excellent diversification

The 3 months correlation between Intevac and Hillenbrand is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Hillenbrand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillenbrand and Intevac 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 Intevac 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 Intevac i.e., Intevac and Hillenbrand go up and down completely randomly.

Pair Corralation between Intevac and Hillenbrand

Given the investment horizon of 90 days Intevac is expected to under-perform the Hillenbrand. In addition to that, Intevac is 1.13 times more volatile than Hillenbrand. It trades about -0.1 of its total potential returns per unit of risk. Hillenbrand is currently generating about 0.06 per unit of volatility. If you would invest  3,091  in Hillenbrand on August 31, 2024 and sell it today you would earn a total of  293.00  from holding Hillenbrand or generate 9.48% return on investment over 90 days.

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

Intevac  vs.  Hillenbrand

Intevac

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intevac has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Hillenbrand

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hillenbrand are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Hillenbrand may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Intevac and Hillenbrand

The main advantage of trading using opposite Intevac and Hillenbrand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intevac 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 Intevac 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.