Correlation Between Collins Foods and Hansen Technologies
Can any of the company-specific risk be diversified away by investing in both Collins Foods and Hansen Technologies 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 Collins Foods and Hansen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collins Foods and Hansen Technologies, you can compare the effects of market volatilities on Collins Foods and Hansen Technologies 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 Collins Foods with a short position of Hansen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and Hansen Technologies.
Diversification Opportunities for Collins Foods and Hansen Technologies
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Collins and Hansen is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies and Collins Foods 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 Collins Foods are associated (or correlated) with Hansen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansen Technologies has no effect on the direction of Collins Foods i.e., Collins Foods and Hansen Technologies go up and down completely randomly.
Pair Corralation between Collins Foods and Hansen Technologies
Assuming the 90 days trading horizon Collins Foods is expected to generate 3.9 times less return on investment than Hansen Technologies. In addition to that, Collins Foods is 1.12 times more volatile than Hansen Technologies. It trades about 0.0 of its total potential returns per unit of risk. Hansen Technologies is currently generating about 0.02 per unit of volatility. If you would invest 483.00 in Hansen Technologies on October 12, 2024 and sell it today you would earn a total of 42.00 from holding Hansen Technologies or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collins Foods vs. Hansen Technologies
Performance |
| Timeline |
| Collins Foods |
| Hansen Technologies |
Collins Foods and Hansen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collins Foods and Hansen Technologies
The main advantage of trading using opposite Collins Foods and Hansen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collins Foods position performs unexpectedly, Hansen Technologies 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 Hansen Technologies will offset losses from the drop in Hansen Technologies' long position.| Collins Foods vs. Retail Food Group | Collins Foods vs. Bailador Technology Invest | Collins Foods vs. Hansen Technologies | Collins Foods vs. Genetic Technologies |
| Hansen Technologies vs. Aneka Tambang Tbk | Hansen Technologies vs. Macquarie Group Ltd | Hansen Technologies vs. BHP Group Limited | Hansen Technologies vs. Block Inc |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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