Correlation Between Hastings Technology and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both Hastings Technology and IMPERIAL TOBACCO 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 Hastings Technology and IMPERIAL TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hastings Technology Metals and IMPERIAL TOBACCO , you can compare the effects of market volatilities on Hastings Technology and IMPERIAL TOBACCO 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 Hastings Technology with a short position of IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hastings Technology and IMPERIAL TOBACCO.
Diversification Opportunities for Hastings Technology and IMPERIAL TOBACCO
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hastings and IMPERIAL is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hastings Technology Metals and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO and Hastings Technology 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 Hastings Technology Metals are associated (or correlated) with IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of Hastings Technology i.e., Hastings Technology and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between Hastings Technology and IMPERIAL TOBACCO
Assuming the 90 days horizon Hastings Technology Metals is expected to generate 7.67 times more return on investment than IMPERIAL TOBACCO. However, Hastings Technology is 7.67 times more volatile than IMPERIAL TOBACCO . It trades about 0.09 of its potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.23 per unit of risk. If you would invest 11.00 in Hastings Technology Metals on September 2, 2024 and sell it today you would earn a total of 7.00 from holding Hastings Technology Metals or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hastings Technology Metals vs. IMPERIAL TOBACCO
Performance |
| Timeline |
| Hastings Technology |
| IMPERIAL TOBACCO |
Hastings Technology and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hastings Technology and IMPERIAL TOBACCO
The main advantage of trading using opposite Hastings Technology and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hastings Technology position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.| Hastings Technology vs. BHP Group Limited | Hastings Technology vs. Rio Tinto Group | Hastings Technology vs. Vale SA | Hastings Technology vs. Vale SA |
| IMPERIAL TOBACCO vs. SIVERS SEMICONDUCTORS AB | IMPERIAL TOBACCO vs. Darden Restaurants | IMPERIAL TOBACCO vs. Reliance Steel Aluminum | IMPERIAL TOBACCO vs. Q2M Managementberatung AG |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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