Correlation Between Hansen Technologies and WA1 Resources
Can any of the company-specific risk be diversified away by investing in both Hansen Technologies and WA1 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 WA1 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 WA1 Resources, you can compare the effects of market volatilities on Hansen Technologies and WA1 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 WA1 Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansen Technologies and WA1 Resources.
Diversification Opportunities for Hansen Technologies and WA1 Resources
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hansen and WA1 is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hansen Technologies and WA1 Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WA1 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 WA1 Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WA1 Resources has no effect on the direction of Hansen Technologies i.e., Hansen Technologies and WA1 Resources go up and down completely randomly.
Pair Corralation between Hansen Technologies and WA1 Resources
Assuming the 90 days trading horizon Hansen Technologies is expected to generate 2.82 times less return on investment than WA1 Resources. But when comparing it to its historical volatility, Hansen Technologies is 2.57 times less risky than WA1 Resources. It trades about 0.1 of its potential returns per unit of risk. WA1 Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,362 in WA1 Resources on September 13, 2024 and sell it today you would earn a total of 248.00 from holding WA1 Resources or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansen Technologies vs. WA1 Resources
Performance |
| Timeline |
| Hansen Technologies |
| WA1 Resources |
Hansen Technologies and WA1 Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansen Technologies and WA1 Resources
The main advantage of trading using opposite Hansen Technologies and WA1 Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansen Technologies position performs unexpectedly, WA1 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 WA1 Resources will offset losses from the drop in WA1 Resources' long position.| Hansen Technologies vs. Pioneer Credit | Hansen Technologies vs. BSP Financial Group | Hansen Technologies vs. Insignia Financial | Hansen Technologies vs. Retail Food Group |
| WA1 Resources vs. Aeris Environmental | WA1 Resources vs. Bisalloy Steel Group | WA1 Resources vs. Falcon Metals | WA1 Resources vs. Tombador Iron |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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