Correlation Between HAMMONIA Schiffsholding and FIREWEED METALS
Can any of the company-specific risk be diversified away by investing in both HAMMONIA Schiffsholding and FIREWEED METALS 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 HAMMONIA Schiffsholding and FIREWEED METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HAMMONIA Schiffsholding AG and FIREWEED METALS P, you can compare the effects of market volatilities on HAMMONIA Schiffsholding and FIREWEED METALS 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 HAMMONIA Schiffsholding with a short position of FIREWEED METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAMMONIA Schiffsholding and FIREWEED METALS.
Diversification Opportunities for HAMMONIA Schiffsholding and FIREWEED METALS
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HAMMONIA and FIREWEED is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding HAMMONIA Schiffsholding AG and FIREWEED METALS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIREWEED METALS P and HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding AG are associated (or correlated) with FIREWEED METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIREWEED METALS P has no effect on the direction of HAMMONIA Schiffsholding i.e., HAMMONIA Schiffsholding and FIREWEED METALS go up and down completely randomly.
Pair Corralation between HAMMONIA Schiffsholding and FIREWEED METALS
Assuming the 90 days trading horizon HAMMONIA Schiffsholding AG is expected to generate 1.06 times more return on investment than FIREWEED METALS. However, HAMMONIA Schiffsholding is 1.06 times more volatile than FIREWEED METALS P. It trades about 0.01 of its potential returns per unit of risk. FIREWEED METALS P is currently generating about -0.06 per unit of risk. If you would invest 28,600 in HAMMONIA Schiffsholding AG on August 31, 2024 and sell it today you would earn a total of 0.00 from holding HAMMONIA Schiffsholding AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HAMMONIA Schiffsholding AG vs. FIREWEED METALS P
Performance |
| Timeline |
| HAMMONIA Schiffsholding |
| FIREWEED METALS P |
HAMMONIA Schiffsholding and FIREWEED METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HAMMONIA Schiffsholding and FIREWEED METALS
The main advantage of trading using opposite HAMMONIA Schiffsholding and FIREWEED METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAMMONIA Schiffsholding position performs unexpectedly, FIREWEED METALS 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 FIREWEED METALS will offset losses from the drop in FIREWEED METALS's long position.The idea behind HAMMONIA Schiffsholding AG and FIREWEED METALS P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| FIREWEED METALS vs. Rio Tinto Group | FIREWEED METALS vs. Liontown Resources Limited | FIREWEED METALS vs. American Lithium Corp | FIREWEED METALS vs. ADRIATIC METALS LS 013355 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |