Correlation Between HAMMONIA Schiffsholding and NEXA RESOURCES
Can any of the company-specific risk be diversified away by investing in both HAMMONIA Schiffsholding and NEXA RESOURCES 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 NEXA RESOURCES 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 NEXA RESOURCES SA, you can compare the effects of market volatilities on HAMMONIA Schiffsholding and NEXA RESOURCES 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 NEXA RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAMMONIA Schiffsholding and NEXA RESOURCES.
Diversification Opportunities for HAMMONIA Schiffsholding and NEXA RESOURCES
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HAMMONIA and NEXA is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding HAMMONIA Schiffsholding AG and NEXA RESOURCES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXA RESOURCES SA 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 NEXA RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXA RESOURCES SA has no effect on the direction of HAMMONIA Schiffsholding i.e., HAMMONIA Schiffsholding and NEXA RESOURCES go up and down completely randomly.
Pair Corralation between HAMMONIA Schiffsholding and NEXA RESOURCES
Assuming the 90 days trading horizon HAMMONIA Schiffsholding AG is expected to generate 1.15 times more return on investment than NEXA RESOURCES. However, HAMMONIA Schiffsholding is 1.15 times more volatile than NEXA RESOURCES SA. It trades about 0.01 of its potential returns per unit of risk. NEXA RESOURCES SA is currently generating about -0.02 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. NEXA RESOURCES SA
Performance |
| Timeline |
| HAMMONIA Schiffsholding |
| NEXA RESOURCES SA |
HAMMONIA Schiffsholding and NEXA RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HAMMONIA Schiffsholding and NEXA RESOURCES
The main advantage of trading using opposite HAMMONIA Schiffsholding and NEXA RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAMMONIA Schiffsholding position performs unexpectedly, NEXA RESOURCES 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 NEXA RESOURCES will offset losses from the drop in NEXA RESOURCES's long position.The idea behind HAMMONIA Schiffsholding AG and NEXA RESOURCES SA 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.| NEXA RESOURCES vs. Computer And Technologies | NEXA RESOURCES vs. ARDAGH METAL PACDL 0001 | NEXA RESOURCES vs. Check Point Software | NEXA RESOURCES vs. PKSHA TECHNOLOGY INC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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