Correlation Between Pan American and Hansa Investment
Can any of the company-specific risk be diversified away by investing in both Pan American and Hansa Investment 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 Pan American and Hansa Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan American Silver and Hansa Investment, you can compare the effects of market volatilities on Pan American and Hansa Investment 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 Pan American with a short position of Hansa Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan American and Hansa Investment.
Diversification Opportunities for Pan American and Hansa Investment
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pan and Hansa is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Pan American Silver and Hansa Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Investment and Pan American 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 Pan American Silver are associated (or correlated) with Hansa Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Investment has no effect on the direction of Pan American i.e., Pan American and Hansa Investment go up and down completely randomly.
Pair Corralation between Pan American and Hansa Investment
Assuming the 90 days trading horizon Pan American Silver is expected to generate 3.96 times more return on investment than Hansa Investment. However, Pan American is 3.96 times more volatile than Hansa Investment. It trades about 0.03 of its potential returns per unit of risk. Hansa Investment is currently generating about 0.06 per unit of risk. If you would invest 3,085 in Pan American Silver on October 18, 2024 and sell it today you would lose (60.00) from holding Pan American Silver or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Pan American Silver vs. Hansa Investment
Performance |
| Timeline |
| Pan American Silver |
| Hansa Investment |
Pan American and Hansa Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan American and Hansa Investment
The main advantage of trading using opposite Pan American and Hansa Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan American position performs unexpectedly, Hansa Investment 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 Hansa Investment will offset losses from the drop in Hansa Investment's long position.| Pan American vs. Thor Mining PLC | Pan American vs. Coeur Mining | Pan American vs. Lundin Mining Corp | Pan American vs. Anglo Asian Mining |
| Hansa Investment vs. Manulife Financial Corp | Hansa Investment vs. Sparebank 1 SR | Hansa Investment vs. Eastinco Mining Exploration | Hansa Investment vs. Pan American Silver |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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