Correlation Between Acrow and Hansen Technologies
Can any of the company-specific risk be diversified away by investing in both Acrow and Hansen Technologies 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 Acrow and Hansen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acrow Limited and Hansen Technologies, you can compare the effects of market volatilities on Acrow and Hansen Technologies 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 Acrow with a short position of Hansen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acrow and Hansen Technologies.
Diversification Opportunities for Acrow and Hansen Technologies
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Acrow and Hansen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Acrow Limited and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies and Acrow 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 Acrow Limited are associated (or correlated) with Hansen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansen Technologies has no effect on the direction of Acrow i.e., Acrow and Hansen Technologies go up and down completely randomly.
Pair Corralation between Acrow and Hansen Technologies
Assuming the 90 days trading horizon Acrow Limited is expected to generate 1.23 times more return on investment than Hansen Technologies. However, Acrow is 1.23 times more volatile than Hansen Technologies. It trades about 0.07 of its potential returns per unit of risk. Hansen Technologies is currently generating about 0.03 per unit of risk. If you would invest 57.00 in Acrow Limited on September 2, 2024 and sell it today you would earn a total of 51.00 from holding Acrow Limited or generate 89.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acrow Limited vs. Hansen Technologies
Performance |
| Timeline |
| Acrow Limited |
| Hansen Technologies |
Acrow and Hansen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acrow and Hansen Technologies
The main advantage of trading using opposite Acrow and Hansen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acrow position performs unexpectedly, Hansen Technologies 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 Hansen Technologies will offset losses from the drop in Hansen Technologies' long position.| Acrow vs. Jupiter Energy | Acrow vs. WA1 Resources | Acrow vs. Predictive Discovery | Acrow vs. Cooper Metals |
| Hansen Technologies vs. Audio Pixels Holdings | Hansen Technologies vs. Norwest Minerals | Hansen Technologies vs. Lindian Resources | Hansen Technologies vs. Rumble Resources |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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