Correlation Between Hammond Manufacturing and Baylin Technologies
Can any of the company-specific risk be diversified away by investing in both Hammond Manufacturing and Baylin Technologies 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 Hammond Manufacturing and Baylin Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hammond Manufacturing and Baylin Technologies, you can compare the effects of market volatilities on Hammond Manufacturing and Baylin Technologies 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 Hammond Manufacturing with a short position of Baylin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammond Manufacturing and Baylin Technologies.
Diversification Opportunities for Hammond Manufacturing and Baylin Technologies
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hammond and Baylin is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hammond Manufacturing and Baylin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baylin Technologies and Hammond Manufacturing 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 Hammond Manufacturing are associated (or correlated) with Baylin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baylin Technologies has no effect on the direction of Hammond Manufacturing i.e., Hammond Manufacturing and Baylin Technologies go up and down completely randomly.
Pair Corralation between Hammond Manufacturing and Baylin Technologies
Assuming the 90 days trading horizon Hammond Manufacturing is expected to generate 0.24 times more return on investment than Baylin Technologies. However, Hammond Manufacturing is 4.25 times less risky than Baylin Technologies. It trades about 0.02 of its potential returns per unit of risk. Baylin Technologies is currently generating about -0.11 per unit of risk. If you would invest 994.00 in Hammond Manufacturing on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Hammond Manufacturing or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hammond Manufacturing vs. Baylin Technologies
Performance |
| Timeline |
| Hammond Manufacturing |
| Baylin Technologies |
Hammond Manufacturing and Baylin Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hammond Manufacturing and Baylin Technologies
The main advantage of trading using opposite Hammond Manufacturing and Baylin Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hammond Manufacturing position performs unexpectedly, Baylin Technologies 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 Baylin Technologies will offset losses from the drop in Baylin Technologies' long position.| Hammond Manufacturing vs. Baylin Technologies | Hammond Manufacturing vs. Supremex | Hammond Manufacturing vs. iShares Canadian HYBrid | Hammond Manufacturing vs. Brompton European Dividend |
| Baylin Technologies vs. Quarterhill | Baylin Technologies vs. Diamond Estates Wines | Baylin Technologies vs. CareRx Corp |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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