Correlation Between Hammond Power and Dynacor Gold
Can any of the company-specific risk be diversified away by investing in both Hammond Power and Dynacor Gold 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 Hammond Power and Dynacor Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hammond Power Solutions and Dynacor Gold Mines, you can compare the effects of market volatilities on Hammond Power and Dynacor Gold 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 Hammond Power with a short position of Dynacor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammond Power and Dynacor Gold.
Diversification Opportunities for Hammond Power and Dynacor Gold
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hammond and Dynacor is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hammond Power Solutions and Dynacor Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynacor Gold Mines and Hammond Power 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 Hammond Power Solutions are associated (or correlated) with Dynacor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynacor Gold Mines has no effect on the direction of Hammond Power i.e., Hammond Power and Dynacor Gold go up and down completely randomly.
Pair Corralation between Hammond Power and Dynacor Gold
Assuming the 90 days trading horizon Hammond Power Solutions is expected to under-perform the Dynacor Gold. But the stock apears to be less risky and, when comparing its historical volatility, Hammond Power Solutions is 1.01 times less risky than Dynacor Gold. The stock trades about -0.55 of its potential returns per unit of risk. The Dynacor Gold Mines is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 599.00 in Dynacor Gold Mines on November 28, 2024 and sell it today you would lose (45.00) from holding Dynacor Gold Mines or give up 7.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hammond Power Solutions vs. Dynacor Gold Mines
Performance |
| Timeline |
| Hammond Power Solutions |
| Dynacor Gold Mines |
Hammond Power and Dynacor Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hammond Power and Dynacor Gold
The main advantage of trading using opposite Hammond Power and Dynacor Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hammond Power position performs unexpectedly, Dynacor Gold 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 Dynacor Gold will offset losses from the drop in Dynacor Gold's long position.| Hammond Power vs. Hammond Manufacturing | Hammond Power vs. Firan Technology Group | Hammond Power vs. Supremex | Hammond Power vs. Geodrill Limited |
| Dynacor Gold vs. Erdene Resource Development | Dynacor Gold vs. Starcore International Mines | Dynacor Gold vs. GoldQuest Mining Corp | Dynacor Gold vs. Belo Sun Mining |
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 CEOs Directory module to screen CEOs from public companies around the world.
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