Correlation Between HAMMONIA Schiffsholding and TransAlta
Can any of the company-specific risk be diversified away by investing in both HAMMONIA Schiffsholding and TransAlta 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 TransAlta 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 TransAlta, you can compare the effects of market volatilities on HAMMONIA Schiffsholding and TransAlta 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 TransAlta. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAMMONIA Schiffsholding and TransAlta.
Diversification Opportunities for HAMMONIA Schiffsholding and TransAlta
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HAMMONIA and TransAlta is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding HAMMONIA Schiffsholding AG and TransAlta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAlta 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 TransAlta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAlta has no effect on the direction of HAMMONIA Schiffsholding i.e., HAMMONIA Schiffsholding and TransAlta go up and down completely randomly.
Pair Corralation between HAMMONIA Schiffsholding and TransAlta
Assuming the 90 days trading horizon HAMMONIA Schiffsholding is expected to generate 7.68 times less return on investment than TransAlta. But when comparing it to its historical volatility, HAMMONIA Schiffsholding AG is 1.17 times less risky than TransAlta. It trades about 0.02 of its potential returns per unit of risk. TransAlta is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 651.00 in TransAlta on August 29, 2024 and sell it today you would earn a total of 362.00 from holding TransAlta or generate 55.61% 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. TransAlta
Performance |
| Timeline |
| HAMMONIA Schiffsholding |
| TransAlta |
HAMMONIA Schiffsholding and TransAlta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HAMMONIA Schiffsholding and TransAlta
The main advantage of trading using opposite HAMMONIA Schiffsholding and TransAlta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAMMONIA Schiffsholding position performs unexpectedly, TransAlta 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 TransAlta will offset losses from the drop in TransAlta's long position.| HAMMONIA Schiffsholding vs. COSCO SHIPPING Energy | HAMMONIA Schiffsholding vs. Superior Plus Corp | HAMMONIA Schiffsholding vs. NMI Holdings | HAMMONIA Schiffsholding vs. SIVERS SEMICONDUCTORS AB |
| TransAlta vs. CN YANGTPWR GDR | TransAlta vs. Superior Plus Corp | TransAlta vs. SIVERS SEMICONDUCTORS AB | TransAlta vs. Talanx AG |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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