Correlation Between Finexia Financial and Hansen Technologies
Can any of the company-specific risk be diversified away by investing in both Finexia Financial 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 Finexia Financial and Hansen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finexia Financial Group and Hansen Technologies, you can compare the effects of market volatilities on Finexia Financial 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 Finexia Financial with a short position of Hansen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and Hansen Technologies.
Diversification Opportunities for Finexia Financial and Hansen Technologies
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Finexia and Hansen is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies and Finexia Financial 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 Finexia Financial Group 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 Finexia Financial i.e., Finexia Financial and Hansen Technologies go up and down completely randomly.
Pair Corralation between Finexia Financial and Hansen Technologies
Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 0.86 times more return on investment than Hansen Technologies. However, Finexia Financial Group is 1.17 times less risky than Hansen Technologies. It trades about 0.33 of its potential returns per unit of risk. Hansen Technologies is currently generating about 0.08 per unit of risk. If you would invest 27.00 in Finexia Financial Group on November 7, 2024 and sell it today you would earn a total of 2.00 from holding Finexia Financial Group or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Finexia Financial Group vs. Hansen Technologies
Performance |
| Timeline |
| Finexia Financial |
| Hansen Technologies |
Finexia Financial and Hansen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finexia Financial and Hansen Technologies
The main advantage of trading using opposite Finexia Financial and Hansen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finexia Financial 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.| Finexia Financial vs. Bell Financial Group | Finexia Financial vs. EMvision Medical Devices | Finexia Financial vs. Macquarie Bank Limited | Finexia Financial vs. MetalsGrove Mining |
| Hansen Technologies vs. Djerriwarrh Investments | Hansen Technologies vs. Sandon Capital Investments | Hansen Technologies vs. DMC Mining | Hansen Technologies vs. Hotel Property Investments |
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 CEOs Directory module to screen CEOs from public companies around the world.
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