Correlation Between Champion Iron and Harris Technology
Can any of the company-specific risk be diversified away by investing in both Champion Iron and Harris Technology 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 Champion Iron and Harris Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and Harris Technology Group, you can compare the effects of market volatilities on Champion Iron and Harris Technology 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 Champion Iron with a short position of Harris Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and Harris Technology.
Diversification Opportunities for Champion Iron and Harris Technology
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Champion and Harris is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and Harris Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harris Technology and Champion Iron 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 Champion Iron are associated (or correlated) with Harris Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harris Technology has no effect on the direction of Champion Iron i.e., Champion Iron and Harris Technology go up and down completely randomly.
Pair Corralation between Champion Iron and Harris Technology
Assuming the 90 days trading horizon Champion Iron is expected to under-perform the Harris Technology. But the stock apears to be less risky and, when comparing its historical volatility, Champion Iron is 2.75 times less risky than Harris Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Harris Technology Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1.60 in Harris Technology Group on November 27, 2024 and sell it today you would lose (0.60) from holding Harris Technology Group or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.17% |
| Values | Daily Returns |
Champion Iron vs. Harris Technology Group
Performance |
| Timeline |
| Champion Iron |
| Harris Technology |
Champion Iron and Harris Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and Harris Technology
The main advantage of trading using opposite Champion Iron and Harris Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron position performs unexpectedly, Harris Technology 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 Harris Technology will offset losses from the drop in Harris Technology's long position.| Champion Iron vs. Clime Investment Management | Champion Iron vs. Advanced Braking Technology | Champion Iron vs. Pinnacle Investment Management | Champion Iron vs. Microequities Asset Management |
| Harris Technology vs. Catalyst Metals | Harris Technology vs. Dalaroo Metals | Harris Technology vs. Centuria Industrial Reit | Harris Technology vs. National Storage REIT |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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