Correlation Between H B and Hawkins

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

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

Diversification Opportunities for H B and Hawkins

0.72

Correlation Coefficient

H B  Hawkins

Poor diversification

The 3 months correlation between FUL and Hawkins is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding H B Fuller and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins and H B 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 H B Fuller are associated (or correlated) with Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of H B i.e., H B and Hawkins go up and down completely randomly.

Pair Corralation between H B and Hawkins

Considering the 90-day investment horizon H B is expected to generate 5.31 times less return on investment than Hawkins. In addition to that, H B is 1.52 times more volatile than Hawkins. It trades about 0.04 of its total potential returns per unit of risk. Hawkins is currently generating about 0.31 per unit of volatility. If you would invest  11,964  in Hawkins on May 5, 2025 and sell it today you would earn a total of  3,919  from holding Hawkins or generate 32.76% return on investment over 90 days.

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

H B Fuller  vs.  Hawkins

H B Fuller

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in H B Fuller are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, H B is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Hawkins

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hawkins are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting forward-looking signals, Hawkins displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with H B and Hawkins

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

The idea behind H B Fuller and Hawkins 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.