Correlation Between Hansen Technologies and Encounter Resources
Can any of the company-specific risk be diversified away by investing in both Hansen Technologies and Encounter Resources 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 Hansen Technologies and Encounter Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansen Technologies and Encounter Resources, you can compare the effects of market volatilities on Hansen Technologies and Encounter Resources 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 Hansen Technologies with a short position of Encounter Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansen Technologies and Encounter Resources.
Diversification Opportunities for Hansen Technologies and Encounter Resources
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hansen and Encounter is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hansen Technologies and Encounter Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encounter Resources and Hansen Technologies 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 Hansen Technologies are associated (or correlated) with Encounter Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encounter Resources has no effect on the direction of Hansen Technologies i.e., Hansen Technologies and Encounter Resources go up and down completely randomly.
Pair Corralation between Hansen Technologies and Encounter Resources
Assuming the 90 days trading horizon Hansen Technologies is expected to generate 3.04 times less return on investment than Encounter Resources. But when comparing it to its historical volatility, Hansen Technologies is 4.36 times less risky than Encounter Resources. It trades about 0.04 of its potential returns per unit of risk. Encounter Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 31.00 in Encounter Resources on October 12, 2024 and sell it today you would lose (1.00) from holding Encounter Resources or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansen Technologies vs. Encounter Resources
Performance |
| Timeline |
| Hansen Technologies |
| Encounter Resources |
Hansen Technologies and Encounter Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansen Technologies and Encounter Resources
The main advantage of trading using opposite Hansen Technologies and Encounter Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansen Technologies position performs unexpectedly, Encounter Resources 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 Encounter Resources will offset losses from the drop in Encounter Resources' long position.| Hansen Technologies vs. MFF Capital Investments | Hansen Technologies vs. Mach7 Technologies | Hansen Technologies vs. Readytech Holdings | Hansen Technologies vs. Collins Foods |
| Encounter Resources vs. Sandon Capital Investments | Encounter Resources vs. Hansen Technologies | Encounter Resources vs. Richmond Vanadium Technology | Encounter Resources vs. Hotel Property Investments |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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