Correlation Between Hammerson PLC and Target Healthcare
Can any of the company-specific risk be diversified away by investing in both Hammerson PLC and Target Healthcare 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 Target Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hammerson PLC and Target Healthcare REIT, you can compare the effects of market volatilities on Hammerson PLC and Target Healthcare 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 Target Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammerson PLC and Target Healthcare.
Diversification Opportunities for Hammerson PLC and Target Healthcare
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hammerson and Target is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hammerson PLC and Target Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Healthcare REIT 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 Target Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Healthcare REIT has no effect on the direction of Hammerson PLC i.e., Hammerson PLC and Target Healthcare go up and down completely randomly.
Pair Corralation between Hammerson PLC and Target Healthcare
Assuming the 90 days trading horizon Hammerson PLC is expected to under-perform the Target Healthcare. In addition to that, Hammerson PLC is 1.4 times more volatile than Target Healthcare REIT. It trades about -0.16 of its total potential returns per unit of risk. Target Healthcare REIT is currently generating about -0.16 per unit of volatility. If you would invest 8,804 in Target Healthcare REIT on August 26, 2024 and sell it today you would lose (374.00) from holding Target Healthcare REIT or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hammerson PLC vs. Target Healthcare REIT
Performance |
| Timeline |
| Hammerson PLC |
| Target Healthcare REIT |
Hammerson PLC and Target Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hammerson PLC and Target Healthcare
The main advantage of trading using opposite Hammerson PLC and Target Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hammerson PLC position performs unexpectedly, Target Healthcare 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 Target Healthcare will offset losses from the drop in Target Healthcare's long position.| Hammerson PLC vs. Axfood AB | Hammerson PLC vs. Ebro Foods | Hammerson PLC vs. Grieg Seafood | Hammerson PLC vs. Mindflair Plc |
| Target Healthcare vs. Derwent London PLC | Target Healthcare vs. Hammerson PLC | Target Healthcare vs. Workspace Group PLC | Target Healthcare vs. Supermarket Income 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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