Correlation Between Dynacor Gold and Hammond Power
Can any of the company-specific risk be diversified away by investing in both Dynacor Gold and Hammond Power 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 Dynacor Gold and Hammond Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynacor Gold Mines and Hammond Power Solutions, you can compare the effects of market volatilities on Dynacor Gold and Hammond Power 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 Dynacor Gold with a short position of Hammond Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynacor Gold and Hammond Power.
Diversification Opportunities for Dynacor Gold and Hammond Power
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dynacor and Hammond is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dynacor Gold Mines and Hammond Power Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammond Power Solutions and Dynacor Gold 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 Dynacor Gold Mines are associated (or correlated) with Hammond Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammond Power Solutions has no effect on the direction of Dynacor Gold i.e., Dynacor Gold and Hammond Power go up and down completely randomly.
Pair Corralation between Dynacor Gold and Hammond Power
Assuming the 90 days trading horizon Dynacor Gold Mines is expected to generate 0.58 times more return on investment than Hammond Power. However, Dynacor Gold Mines is 1.74 times less risky than Hammond Power. It trades about 0.14 of its potential returns per unit of risk. Hammond Power Solutions is currently generating about -0.01 per unit of risk. If you would invest 569.00 in Dynacor Gold Mines on August 30, 2024 and sell it today you would earn a total of 33.00 from holding Dynacor Gold Mines or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynacor Gold Mines vs. Hammond Power Solutions
Performance |
| Timeline |
| Dynacor Gold Mines |
| Hammond Power Solutions |
Dynacor Gold and Hammond Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynacor Gold and Hammond Power
The main advantage of trading using opposite Dynacor Gold and Hammond Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynacor Gold position performs unexpectedly, Hammond Power 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 Hammond Power will offset losses from the drop in Hammond Power's long position.| Dynacor Gold vs. Erdene Resource Development | Dynacor Gold vs. Starcore International Mines | Dynacor Gold vs. GoldQuest Mining Corp | Dynacor Gold vs. Belo Sun Mining |
| Hammond Power vs. Hammond Manufacturing | Hammond Power vs. Firan Technology Group | Hammond Power vs. Supremex | Hammond Power vs. Geodrill Limited |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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