Correlation Between Hammerson PLC and Neometals
Can any of the company-specific risk be diversified away by investing in both Hammerson PLC and Neometals 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 Neometals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hammerson PLC and Neometals, you can compare the effects of market volatilities on Hammerson PLC and Neometals 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 Neometals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammerson PLC and Neometals.
Diversification Opportunities for Hammerson PLC and Neometals
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hammerson and Neometals is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hammerson PLC and Neometals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neometals 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 Neometals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neometals has no effect on the direction of Hammerson PLC i.e., Hammerson PLC and Neometals go up and down completely randomly.
Pair Corralation between Hammerson PLC and Neometals
Assuming the 90 days trading horizon Hammerson PLC is expected to generate 9.72 times more return on investment than Neometals. However, Hammerson PLC is 9.72 times more volatile than Neometals. It trades about 0.04 of its potential returns per unit of risk. Neometals is currently generating about -0.09 per unit of risk. If you would invest 30,400 in Hammerson PLC on November 19, 2024 and sell it today you would lose (1,120) from holding Hammerson PLC or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.0% |
| Values | Daily Returns |
Hammerson PLC vs. Neometals
Performance |
| Timeline |
| Hammerson PLC |
| Neometals |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Hammerson PLC and Neometals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hammerson PLC and Neometals
The main advantage of trading using opposite Hammerson PLC and Neometals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hammerson PLC position performs unexpectedly, Neometals 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 Neometals will offset losses from the drop in Neometals' long position.| Hammerson PLC vs. InterContinental Hotels Group | Hammerson PLC vs. SBM Offshore NV | Hammerson PLC vs. Cornish Metals | Hammerson PLC vs. Europa Metals |
| Neometals vs. China Pacific Insurance | Neometals vs. Cardinal Health | Neometals vs. MyHealthChecked Plc | Neometals vs. Target Healthcare REIT |
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 Stocks Directory module to find actively traded stocks across global markets.
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