Correlation Between Hansen Technologies and Mayfield Childcare
Can any of the company-specific risk be diversified away by investing in both Hansen Technologies and Mayfield Childcare 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 Mayfield Childcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansen Technologies and Mayfield Childcare, you can compare the effects of market volatilities on Hansen Technologies and Mayfield Childcare 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 Mayfield Childcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansen Technologies and Mayfield Childcare.
Diversification Opportunities for Hansen Technologies and Mayfield Childcare
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hansen and Mayfield is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hansen Technologies and Mayfield Childcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfield Childcare 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 Mayfield Childcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayfield Childcare has no effect on the direction of Hansen Technologies i.e., Hansen Technologies and Mayfield Childcare go up and down completely randomly.
Pair Corralation between Hansen Technologies and Mayfield Childcare
Assuming the 90 days trading horizon Hansen Technologies is expected to generate 0.68 times more return on investment than Mayfield Childcare. However, Hansen Technologies is 1.48 times less risky than Mayfield Childcare. It trades about 0.02 of its potential returns per unit of risk. Mayfield Childcare is currently generating about -0.06 per unit of risk. If you would invest 499.00 in Hansen Technologies on September 12, 2024 and sell it today you would earn a total of 38.00 from holding Hansen Technologies or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansen Technologies vs. Mayfield Childcare
Performance |
| Timeline |
| Hansen Technologies |
| Mayfield Childcare |
Hansen Technologies and Mayfield Childcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansen Technologies and Mayfield Childcare
The main advantage of trading using opposite Hansen Technologies and Mayfield Childcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansen Technologies position performs unexpectedly, Mayfield Childcare 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 Mayfield Childcare will offset losses from the drop in Mayfield Childcare's long position.| Hansen Technologies vs. Aneka Tambang Tbk | Hansen Technologies vs. BHP Group Limited | Hansen Technologies vs. Commonwealth Bank | Hansen Technologies vs. Commonwealth Bank of |
| Mayfield Childcare vs. Aneka Tambang Tbk | Mayfield Childcare vs. BHP Group Limited | Mayfield Childcare vs. Commonwealth Bank | Mayfield Childcare vs. Commonwealth Bank of |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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