Correlation Between Cooper Companies and Hill-Rom Holdings

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Can any of the company-specific risk be diversified away by investing in both Cooper Companies and Hill-Rom Holdings 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 Cooper Companies and Hill-Rom Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Cooper Companies and Hill Rom Holdings, you can compare the effects of market volatilities on Cooper Companies and Hill-Rom Holdings 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 Cooper Companies with a short position of Hill-Rom Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Companies and Hill-Rom Holdings.

Diversification Opportunities for Cooper Companies and Hill-Rom Holdings

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Cooper and Hill-Rom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Cooper Companies and Hill-Rom Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hill-Rom Holdings and Cooper Companies 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 The Cooper Companies are associated (or correlated) with Hill-Rom Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hill-Rom Holdings has no effect on the direction of Cooper Companies i.e., Cooper Companies and Hill-Rom Holdings go up and down completely randomly.

Pair Corralation between Cooper Companies and Hill-Rom Holdings

If you would invest  10,276  in The Cooper Companies on December 29, 2023 and sell it today you would lose (130.00) from holding The Cooper Companies or give up 1.27% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

The Cooper Companies  vs.  Hill-Rom Holdings

 Performance 
       Timeline  
Cooper Companies 

Risk-Adjusted Performance

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Modest
Compared to the overall equity markets, risk-adjusted returns on investments in The Cooper Companies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Cooper Companies may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Hill-Rom Holdings 

Risk-Adjusted Performance

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

Cooper Companies and Hill-Rom Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cooper Companies and Hill-Rom Holdings

The main advantage of trading using opposite Cooper Companies and Hill-Rom Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cooper Companies position performs unexpectedly, Hill-Rom Holdings 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 Hill-Rom Holdings will offset losses from the drop in Hill-Rom Holdings' long position.
The idea behind The Cooper Companies and Hill Rom Holdings 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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