Correlation Between Big Yellow and Hammerson PLC
Can any of the company-specific risk be diversified away by investing in both Big Yellow 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 Big Yellow and Hammerson PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Yellow Group and Hammerson PLC, you can compare the effects of market volatilities on Big Yellow 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 Big Yellow with a short position of Hammerson PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Yellow and Hammerson PLC.
Diversification Opportunities for Big Yellow and Hammerson PLC
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Big and Hammerson is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Big Yellow Group and Hammerson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammerson PLC and Big Yellow 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 Big Yellow Group 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 Big Yellow i.e., Big Yellow and Hammerson PLC go up and down completely randomly.
Pair Corralation between Big Yellow and Hammerson PLC
Assuming the 90 days trading horizon Big Yellow Group is expected to under-perform the Hammerson PLC. In addition to that, Big Yellow is 1.03 times more volatile than Hammerson PLC. It trades about -0.28 of its total potential returns per unit of risk. Hammerson PLC is currently generating about -0.05 per unit of volatility. If you would invest 29,640 in Hammerson PLC on September 12, 2024 and sell it today you would lose (1,460) from holding Hammerson PLC or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Yellow Group vs. Hammerson PLC
Performance |
| Timeline |
| Big Yellow Group |
| Hammerson PLC |
Big Yellow and Hammerson PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Yellow and Hammerson PLC
The main advantage of trading using opposite Big Yellow and Hammerson PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Yellow 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.| Big Yellow vs. Addtech | Big Yellow vs. MTI Wireless Edge | Big Yellow vs. Southern Copper Corp | Big Yellow vs. Odfjell Drilling |
| Hammerson PLC vs. Melia Hotels | Hammerson PLC vs. Catalyst Media Group | Hammerson PLC vs. Live Nation Entertainment | Hammerson PLC vs. InterContinental Hotels Group |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |