Correlation Between Powerstorm Holdings and Hubbell

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

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

Diversification Opportunities for Powerstorm Holdings and Hubbell

-0.3

Correlation Coefficient

Powerstorm Holdings  Hubbell

Very good diversification

The 3 months correlation between Powerstorm and Hubbell is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Powerstorm Holdings and Hubbell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubbell and Powerstorm Holdings 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 Powerstorm Holdings are associated (or correlated) with Hubbell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubbell has no effect on the direction of Powerstorm Holdings i.e., Powerstorm Holdings and Hubbell go up and down completely randomly.

Pair Corralation between Powerstorm Holdings and Hubbell

Given the investment horizon of 90 days Powerstorm Holdings is expected to under-perform the Hubbell. In addition to that, Powerstorm Holdings is 4.67 times more volatile than Hubbell. It trades about -0.03 of its total potential returns per unit of risk. Hubbell is currently generating about 0.01 per unit of volatility. If you would invest  42,536  in Hubbell on September 22, 2024 and sell it today you would earn a total of  144.00  from holding Hubbell or generate 0.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Powerstorm Holdings  vs.  Hubbell

Powerstorm Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Powerstorm Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Hubbell

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hubbell has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Hubbell is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Powerstorm Holdings and Hubbell

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

The idea behind Powerstorm Holdings and Hubbell 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 Stocks Directory module to find actively traded stocks across global markets.