Correlation Between Hubbell and Woodward
Can any of the company-specific risk be diversified away by investing in both Hubbell and Woodward 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 Hubbell and Woodward into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hubbell and Woodward, you can compare the effects of market volatilities on Hubbell and Woodward 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 Hubbell with a short position of Woodward. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubbell and Woodward.
Diversification Opportunities for Hubbell and Woodward
Very weak diversification
The 3 months correlation between Hubbell and Woodward is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hubbell and Woodward in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodward and Hubbell 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 Hubbell are associated (or correlated) with Woodward. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodward has no effect on the direction of Hubbell i.e., Hubbell and Woodward go up and down completely randomly.
Pair Corralation between Hubbell and Woodward
Given the investment horizon of 90 days Hubbell is expected to generate 2.0 times less return on investment than Woodward. In addition to that, Hubbell is 1.09 times more volatile than Woodward. It trades about 0.05 of its total potential returns per unit of risk. Woodward is currently generating about 0.11 per unit of volatility. If you would invest 24,658 in Woodward on August 13, 2025 and sell it today you would earn a total of 2,491 from holding Woodward or generate 10.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubbell vs. Woodward
Performance |
| Timeline |
| Hubbell |
| Woodward |
Hubbell and Woodward Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubbell and Woodward
The main advantage of trading using opposite Hubbell and Woodward positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubbell position performs unexpectedly, Woodward 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 Woodward will offset losses from the drop in Woodward's long position.The idea behind Hubbell and Woodward 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.| Woodward vs. Textron | Woodward vs. MasTec Inc | Woodward vs. Southwest Airlines | Woodward vs. Kratos Defense Security |
Check out your portfolio center.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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