Correlation Between Auction Technology and Hargreaves Lansdown
Can any of the company-specific risk be diversified away by investing in both Auction Technology and Hargreaves Lansdown 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 Auction Technology and Hargreaves Lansdown into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction Technology Group and Hargreaves Lansdown plc, you can compare the effects of market volatilities on Auction Technology and Hargreaves Lansdown 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 Auction Technology with a short position of Hargreaves Lansdown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and Hargreaves Lansdown.
Diversification Opportunities for Auction Technology and Hargreaves Lansdown
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Auction and Hargreaves is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and Hargreaves Lansdown plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hargreaves Lansdown plc and Auction 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 Auction Technology Group are associated (or correlated) with Hargreaves Lansdown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hargreaves Lansdown plc has no effect on the direction of Auction Technology i.e., Auction Technology and Hargreaves Lansdown go up and down completely randomly.
Pair Corralation between Auction Technology and Hargreaves Lansdown
Assuming the 90 days trading horizon Auction Technology Group is expected to under-perform the Hargreaves Lansdown. In addition to that, Auction Technology is 1.79 times more volatile than Hargreaves Lansdown plc. It trades about -0.01 of its total potential returns per unit of risk. Hargreaves Lansdown plc is currently generating about 0.05 per unit of volatility. If you would invest 83,676 in Hargreaves Lansdown plc on September 12, 2024 and sell it today you would earn a total of 25,824 from holding Hargreaves Lansdown plc or generate 30.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Auction Technology Group vs. Hargreaves Lansdown plc
Performance |
| Timeline |
| Auction Technology |
| Hargreaves Lansdown plc |
Auction Technology and Hargreaves Lansdown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and Hargreaves Lansdown
The main advantage of trading using opposite Auction Technology and Hargreaves Lansdown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology position performs unexpectedly, Hargreaves Lansdown 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 Hargreaves Lansdown will offset losses from the drop in Hargreaves Lansdown's long position.| Auction Technology vs. Home Depot | Auction Technology vs. Chrysalis Investments | Auction Technology vs. Neometals | Auction Technology vs. Coor Service Management |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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