Correlation Between Hamilton Beach and Turtle Beach

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

Diversification Opportunities for Hamilton Beach and Turtle Beach

0.88

Correlation Coefficient

Hamilton Beach  Turtle Beach

Very poor diversification

The 3 months correlation between Hamilton and Turtle is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and Turtle Beach Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turtle Beach Corp 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 Turtle Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turtle Beach Corp has no effect on the direction of Hamilton Beach i.e., Hamilton Beach and Turtle Beach go up and down completely randomly.

Pair Corralation between Hamilton Beach and Turtle Beach

Considering the 90-day investment horizon Hamilton Beach Brands is expected to generate 2.3 times more return on investment than Turtle Beach. However, Hamilton Beach is 2.3 times more volatile than Turtle Beach Corp. It trades about -0.13 of its potential returns per unit of risk. Turtle Beach Corp is currently generating about -0.53 per unit of risk. If you would invest  2,465  in Hamilton Beach Brands on January 25, 2024 and sell it today you would lose (290.50) from holding Hamilton Beach Brands or give up 11.78% of portfolio value over 90 days.

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

Hamilton Beach Brands  vs.  Turtle Beach Corp

Hamilton Beach Brands

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Beach Brands are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Hamilton Beach sustained solid returns over the last few months and may actually be approaching a breakup point.

Turtle Beach Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Turtle Beach Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Turtle Beach reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hamilton Beach and Turtle Beach

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

The idea behind Hamilton Beach Brands and Turtle Beach Corp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.