Correlation Between Hansen Technologies and Origin Energy
Can any of the company-specific risk be diversified away by investing in both Hansen Technologies and Origin Energy 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 Origin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansen Technologies and Origin Energy, you can compare the effects of market volatilities on Hansen Technologies and Origin Energy 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 Origin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansen Technologies and Origin Energy.
Diversification Opportunities for Hansen Technologies and Origin Energy
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hansen and Origin is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hansen Technologies and Origin Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Energy 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 Origin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Energy has no effect on the direction of Hansen Technologies i.e., Hansen Technologies and Origin Energy go up and down completely randomly.
Pair Corralation between Hansen Technologies and Origin Energy
Assuming the 90 days trading horizon Hansen Technologies is expected to generate 1.47 times more return on investment than Origin Energy. However, Hansen Technologies is 1.47 times more volatile than Origin Energy. It trades about 0.52 of its potential returns per unit of risk. Origin Energy is currently generating about 0.51 per unit of risk. If you would invest 491.00 in Hansen Technologies on September 2, 2024 and sell it today you would earn a total of 90.00 from holding Hansen Technologies or generate 18.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansen Technologies vs. Origin Energy
Performance |
| Timeline |
| Hansen Technologies |
| Origin Energy |
Hansen Technologies and Origin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansen Technologies and Origin Energy
The main advantage of trading using opposite Hansen Technologies and Origin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansen Technologies position performs unexpectedly, Origin Energy 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 Origin Energy will offset losses from the drop in Origin Energy's long position.| Hansen Technologies vs. Audio Pixels Holdings | Hansen Technologies vs. Norwest Minerals | Hansen Technologies vs. Lindian Resources | Hansen Technologies vs. Rumble Resources |
| Origin Energy vs. Hotel Property Investments | Origin Energy vs. A1 Investments Resources | Origin Energy vs. Charter Hall Retail | Origin Energy vs. Regal Investment |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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