Correlation Between Energy Resources and Hansen Technologies
Can any of the company-specific risk be diversified away by investing in both Energy Resources 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 Energy Resources and Hansen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Resources and Hansen Technologies, you can compare the effects of market volatilities on Energy Resources 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 Energy Resources with a short position of Hansen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Resources and Hansen Technologies.
Diversification Opportunities for Energy Resources and Hansen Technologies
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Energy and Hansen is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Energy Resources and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies and Energy Resources 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 Energy Resources 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 Energy Resources i.e., Energy Resources and Hansen Technologies go up and down completely randomly.
Pair Corralation between Energy Resources and Hansen Technologies
Assuming the 90 days trading horizon Energy Resources is expected to generate 8.27 times more return on investment than Hansen Technologies. However, Energy Resources is 8.27 times more volatile than Hansen Technologies. It trades about 0.02 of its potential returns per unit of risk. Hansen Technologies is currently generating about 0.05 per unit of risk. If you would invest 3.10 in Energy Resources on August 31, 2024 and sell it today you would lose (2.90) from holding Energy Resources or give up 93.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Resources vs. Hansen Technologies
Performance |
| Timeline |
| Energy Resources |
| Hansen Technologies |
Energy Resources and Hansen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Resources and Hansen Technologies
The main advantage of trading using opposite Energy Resources and Hansen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Resources 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.| Energy Resources vs. AiMedia Technologies | Energy Resources vs. Infomedia | Energy Resources vs. Argo Investments | Energy Resources vs. Collins Foods |
| Hansen Technologies vs. TPG Telecom | Hansen Technologies vs. Premier Investments | Hansen Technologies vs. Regal Investment | Hansen Technologies vs. Spirit Telecom |
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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