Correlation Between Hamama and Homebiogas
Can any of the company-specific risk be diversified away by investing in both Hamama and Homebiogas 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 Hamama and Homebiogas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamama and Homebiogas, you can compare the effects of market volatilities on Hamama and Homebiogas 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 Hamama with a short position of Homebiogas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamama and Homebiogas.
Diversification Opportunities for Hamama and Homebiogas
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hamama and Homebiogas is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hamama and Homebiogas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homebiogas and Hamama 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 Hamama are associated (or correlated) with Homebiogas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homebiogas has no effect on the direction of Hamama i.e., Hamama and Homebiogas go up and down completely randomly.
Pair Corralation between Hamama and Homebiogas
Assuming the 90 days trading horizon Hamama is expected to under-perform the Homebiogas. But the stock apears to be less risky and, when comparing its historical volatility, Hamama is 1.29 times less risky than Homebiogas. The stock trades about -0.06 of its potential returns per unit of risk. The Homebiogas is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 7,470 in Homebiogas on September 13, 2024 and sell it today you would lose (230.00) from holding Homebiogas or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamama vs. Homebiogas
Performance |
| Timeline |
| Hamama |
| Homebiogas |
Hamama and Homebiogas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamama and Homebiogas
The main advantage of trading using opposite Hamama and Homebiogas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamama position performs unexpectedly, Homebiogas 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 Homebiogas will offset losses from the drop in Homebiogas' long position.| Hamama vs. Bio Meat Foodtech | Hamama vs. Scope Metals Group | Hamama vs. Hiron Trade Investments Industrial | Hamama vs. Opko Health |
| Homebiogas vs. Bank Leumi Le Israel | Homebiogas vs. Millennium Food Tech LP | Homebiogas vs. Oron Group Investments | Homebiogas vs. Ram On Investments and |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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