Correlation Between Capital Counties and Hammerson Plc
Can any of the company-specific risk be diversified away by investing in both Capital Counties 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 Capital Counties and Hammerson Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Counties Properties and Hammerson plc, you can compare the effects of market volatilities on Capital Counties 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 Capital Counties with a short position of Hammerson Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Counties and Hammerson Plc.
Diversification Opportunities for Capital Counties and Hammerson Plc
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capital and Hammerson is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Capital Counties Properties and Hammerson plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammerson plc and Capital Counties 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 Capital Counties Properties 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 Capital Counties i.e., Capital Counties and Hammerson Plc go up and down completely randomly.
Pair Corralation between Capital Counties and Hammerson Plc
Assuming the 90 days horizon Capital Counties Properties is expected to generate 1.03 times more return on investment than Hammerson Plc. However, Capital Counties is 1.03 times more volatile than Hammerson plc. It trades about 0.04 of its potential returns per unit of risk. Hammerson plc is currently generating about 0.03 per unit of risk. If you would invest 134.00 in Capital Counties Properties on August 26, 2024 and sell it today you would earn a total of 20.00 from holding Capital Counties Properties or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Capital Counties Properties vs. Hammerson plc
Performance |
| Timeline |
| Capital Counties Pro |
| Hammerson plc |
Capital Counties and Hammerson Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Counties and Hammerson Plc
The main advantage of trading using opposite Capital Counties and Hammerson Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Counties 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.| Capital Counties vs. INSURANCE AUST GRP | Capital Counties vs. MIRAMAR HOTEL INV | Capital Counties vs. NAKED WINES PLC | Capital Counties vs. ZURICH INSURANCE GROUP |
| Hammerson Plc vs. URW EO 05 | Hammerson Plc vs. WFD Unibail Rodamco | Hammerson Plc vs. Capital Counties Properties |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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