Correlation Between Astoria Investments and Hammerson PLC
Can any of the company-specific risk be diversified away by investing in both Astoria Investments and Hammerson PLC 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 Astoria Investments and Hammerson PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astoria Investments and Hammerson PLC, you can compare the effects of market volatilities on Astoria Investments and Hammerson PLC 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 Astoria Investments with a short position of Hammerson PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astoria Investments and Hammerson PLC.
Diversification Opportunities for Astoria Investments and Hammerson PLC
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astoria and Hammerson is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Astoria Investments and Hammerson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammerson PLC and Astoria Investments 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 Astoria Investments are associated (or correlated) with Hammerson PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammerson PLC has no effect on the direction of Astoria Investments i.e., Astoria Investments and Hammerson PLC go up and down completely randomly.
Pair Corralation between Astoria Investments and Hammerson PLC
Assuming the 90 days trading horizon Astoria Investments is expected to generate 8.36 times less return on investment than Hammerson PLC. But when comparing it to its historical volatility, Astoria Investments is 1.35 times less risky than Hammerson PLC. It trades about 0.01 of its potential returns per unit of risk. Hammerson PLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 641,500 in Hammerson PLC on October 22, 2024 and sell it today you would earn a total of 7,500 from holding Hammerson PLC or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astoria Investments vs. Hammerson PLC
Performance |
| Timeline |
| Astoria Investments |
| Hammerson PLC |
Astoria Investments and Hammerson PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astoria Investments and Hammerson PLC
The main advantage of trading using opposite Astoria Investments and Hammerson PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astoria Investments position performs unexpectedly, Hammerson PLC 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 Hammerson PLC will offset losses from the drop in Hammerson PLC's long position.| Astoria Investments vs. Safari Investments RSA | Astoria Investments vs. Brimstone Investment | Astoria Investments vs. RCL Foods | Astoria Investments vs. HomeChoice Investments |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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