Correlation Between Hillenbrand and Snap On

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

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

Diversification Opportunities for Hillenbrand and Snap On

0.36

Correlation Coefficient

Hillenbrand  Snap On

Weak diversification

The 3 months correlation between Hillenbrand and Snap is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand and Snap On in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snap On and Hillenbrand 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 Hillenbrand are associated (or correlated) with Snap On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snap On has no effect on the direction of Hillenbrand i.e., Hillenbrand and Snap On go up and down completely randomly.

Pair Corralation between Hillenbrand and Snap On

Allowing for the 90-day total investment horizon Hillenbrand is expected to generate 5.06 times less return on investment than Snap On. In addition to that, Hillenbrand is 2.17 times more volatile than Snap On. It trades about 0.0 of its total potential returns per unit of risk. Snap On is currently generating about 0.03 per unit of volatility. If you would invest  31,491  in Snap On on May 8, 2025 and sell it today you would earn a total of  716.00  from holding Snap On or generate 2.27% return on investment over 90 days.

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

Hillenbrand  vs.  Snap On

Hillenbrand

Risk-Adjusted Performance

Weak

Over the last 90 days Hillenbrand has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Hillenbrand is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Snap On

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Snap On are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Snap On is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hillenbrand and Snap On

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

The idea behind Hillenbrand and Snap On 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.