Correlation Between Helios Technologies and Gorman Rupp

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

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

Diversification Opportunities for Helios Technologies and Gorman Rupp

0.77

Correlation Coefficient

Helios Technologies  Gorman Rupp

Poor diversification

The 3 months correlation between Helios and Gorman is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Helios Technologies and Gorman Rupp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gorman Rupp and Helios Technologies 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 Helios Technologies are associated (or correlated) with Gorman Rupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gorman Rupp has no effect on the direction of Helios Technologies i.e., Helios Technologies and Gorman Rupp go up and down completely randomly.

Pair Corralation between Helios Technologies and Gorman Rupp

Given the investment horizon of 90 days Helios Technologies is expected to generate 2.24 times more return on investment than Gorman Rupp. However, Helios Technologies is 2.24 times more volatile than Gorman Rupp. It trades about 0.16 of its potential returns per unit of risk. Gorman Rupp is currently generating about 0.08 per unit of risk. If you would invest  2,815  in Helios Technologies on February 27, 2025 and sell it today you would earn a total of  297.00  from holding Helios Technologies or generate 10.55% return on investment over 90 days.

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

Helios Technologies  vs.  Gorman Rupp

Helios Technologies

Risk-Adjusted Performance

Very Weak

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

Gorman Rupp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gorman Rupp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Gorman Rupp is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Helios Technologies and Gorman Rupp

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

The idea behind Helios Technologies and Gorman Rupp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.