Correlation Between Hammer Metals and Clime Investment
Can any of the company-specific risk be diversified away by investing in both Hammer Metals and Clime Investment 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 Hammer Metals and Clime Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hammer Metals and Clime Investment Management, you can compare the effects of market volatilities on Hammer Metals and Clime Investment 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 Hammer Metals with a short position of Clime Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammer Metals and Clime Investment.
Diversification Opportunities for Hammer Metals and Clime Investment
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hammer and Clime is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hammer Metals and Clime Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clime Investment Man and Hammer Metals 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 Hammer Metals are associated (or correlated) with Clime Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clime Investment Man has no effect on the direction of Hammer Metals i.e., Hammer Metals and Clime Investment go up and down completely randomly.
Pair Corralation between Hammer Metals and Clime Investment
Assuming the 90 days trading horizon Hammer Metals is expected to generate 2.27 times more return on investment than Clime Investment. However, Hammer Metals is 2.27 times more volatile than Clime Investment Management. It trades about 0.0 of its potential returns per unit of risk. Clime Investment Management is currently generating about -0.02 per unit of risk. If you would invest 7.20 in Hammer Metals on October 13, 2024 and sell it today you would lose (3.70) from holding Hammer Metals or give up 51.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hammer Metals vs. Clime Investment Management
Performance |
| Timeline |
| Hammer Metals |
| Clime Investment Man |
Hammer Metals and Clime Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hammer Metals and Clime Investment
The main advantage of trading using opposite Hammer Metals and Clime Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hammer Metals position performs unexpectedly, Clime Investment 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 Clime Investment will offset losses from the drop in Clime Investment's long position.| Hammer Metals vs. Bio Gene Technology | Hammer Metals vs. 4Dmedical | Hammer Metals vs. Hotel Property Investments | Hammer Metals vs. Hutchison Telecommunications |
| Clime Investment vs. Sports Entertainment Group | Clime Investment vs. Hammer Metals | Clime Investment vs. Torque Metals | Clime Investment vs. Homeco Daily Needs |
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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