Correlation Between Hammerson PLC and Pan African
Can any of the company-specific risk be diversified away by investing in both Hammerson PLC and Pan African 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 Hammerson PLC and Pan African into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hammerson PLC and Pan African Resources, you can compare the effects of market volatilities on Hammerson PLC and Pan African 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 Hammerson PLC with a short position of Pan African. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammerson PLC and Pan African.
Diversification Opportunities for Hammerson PLC and Pan African
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hammerson and Pan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hammerson PLC and Pan African Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan African Resources and Hammerson PLC 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 Hammerson PLC are associated (or correlated) with Pan African. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan African Resources has no effect on the direction of Hammerson PLC i.e., Hammerson PLC and Pan African go up and down completely randomly.
Pair Corralation between Hammerson PLC and Pan African
Assuming the 90 days trading horizon Hammerson PLC is expected to under-perform the Pan African. But the stock apears to be less risky and, when comparing its historical volatility, Hammerson PLC is 2.36 times less risky than Pan African. The stock trades about -0.35 of its potential returns per unit of risk. The Pan African Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 82,300 in Pan African Resources on August 28, 2024 and sell it today you would earn a total of 300.00 from holding Pan African Resources or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hammerson PLC vs. Pan African Resources
Performance |
| Timeline |
| Hammerson PLC |
| Pan African Resources |
Hammerson PLC and Pan African Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hammerson PLC and Pan African
The main advantage of trading using opposite Hammerson PLC and Pan African positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hammerson PLC position performs unexpectedly, Pan African 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 Pan African will offset losses from the drop in Pan African's long position.| Hammerson PLC vs. Vukile Property | Hammerson PLC vs. Sasol Ltd Bee | Hammerson PLC vs. Growthpoint Properties | Hammerson PLC vs. AfricaRhodium ETF |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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