Correlation Between Hammer Metals and Meeka Metals
Can any of the company-specific risk be diversified away by investing in both Hammer Metals and Meeka Metals 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 Meeka Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hammer Metals and Meeka Metals Limited, you can compare the effects of market volatilities on Hammer Metals and Meeka Metals 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 Meeka Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammer Metals and Meeka Metals.
Diversification Opportunities for Hammer Metals and Meeka Metals
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hammer and Meeka is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hammer Metals and Meeka Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meeka Metals Limited 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 Meeka Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meeka Metals Limited has no effect on the direction of Hammer Metals i.e., Hammer Metals and Meeka Metals go up and down completely randomly.
Pair Corralation between Hammer Metals and Meeka Metals
Assuming the 90 days trading horizon Hammer Metals is expected to under-perform the Meeka Metals. But the stock apears to be less risky and, when comparing its historical volatility, Hammer Metals is 1.13 times less risky than Meeka Metals. The stock trades about -0.07 of its potential returns per unit of risk. The Meeka Metals Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8.70 in Meeka Metals Limited on November 1, 2024 and sell it today you would earn a total of 2.30 from holding Meeka Metals Limited or generate 26.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hammer Metals vs. Meeka Metals Limited
Performance |
| Timeline |
| Hammer Metals |
| Meeka Metals Limited |
Hammer Metals and Meeka Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hammer Metals and Meeka Metals
The main advantage of trading using opposite Hammer Metals and Meeka Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hammer Metals position performs unexpectedly, Meeka Metals 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 Meeka Metals will offset losses from the drop in Meeka Metals' long position.| Hammer Metals vs. Spirit Telecom | Hammer Metals vs. Argo Investments | Hammer Metals vs. Queste Communications | Hammer Metals vs. Alternative Investment Trust |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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