Correlation Between Hansa Investment and Wizz Air
Can any of the company-specific risk be diversified away by investing in both Hansa Investment and Wizz Air 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 Hansa Investment and Wizz Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansa Investment and Wizz Air Holdings, you can compare the effects of market volatilities on Hansa Investment and Wizz Air 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 Hansa Investment with a short position of Wizz Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Investment and Wizz Air.
Diversification Opportunities for Hansa Investment and Wizz Air
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hansa and Wizz is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Investment and Wizz Air Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wizz Air Holdings and Hansa Investment 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 Hansa Investment are associated (or correlated) with Wizz Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wizz Air Holdings has no effect on the direction of Hansa Investment i.e., Hansa Investment and Wizz Air go up and down completely randomly.
Pair Corralation between Hansa Investment and Wizz Air
Assuming the 90 days trading horizon Hansa Investment is expected to generate 0.37 times more return on investment than Wizz Air. However, Hansa Investment is 2.72 times less risky than Wizz Air. It trades about -0.17 of its potential returns per unit of risk. Wizz Air Holdings is currently generating about -0.07 per unit of risk. If you would invest 23,000 in Hansa Investment on September 2, 2024 and sell it today you would lose (1,100) from holding Hansa Investment or give up 4.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansa Investment vs. Wizz Air Holdings
Performance |
| Timeline |
| Hansa Investment |
| Wizz Air Holdings |
Hansa Investment and Wizz Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansa Investment and Wizz Air
The main advantage of trading using opposite Hansa Investment and Wizz Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Investment position performs unexpectedly, Wizz Air 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 Wizz Air will offset losses from the drop in Wizz Air's long position.| Hansa Investment vs. CATCo Reinsurance Opportunities | Hansa Investment vs. BH Macro Limited | Hansa Investment vs. Fair Oaks Income | Hansa Investment vs. Legal General Group |
| Wizz Air vs. Blackrock World Mining | Wizz Air vs. Various Eateries PLC | Wizz Air vs. Sparebank 1 SR | Wizz Air vs. Beowulf Mining |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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