Correlation Between Harris Technology and Summit Resources
Can any of the company-specific risk be diversified away by investing in both Harris Technology and Summit 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 Harris Technology and Summit Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harris Technology Group and Summit Resources Limited, you can compare the effects of market volatilities on Harris Technology and Summit 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 Harris Technology with a short position of Summit Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harris Technology and Summit Resources.
Diversification Opportunities for Harris Technology and Summit Resources
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harris and Summit is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Harris Technology Group and Summit Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Resources and Harris Technology 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 Harris Technology Group are associated (or correlated) with Summit Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Resources has no effect on the direction of Harris Technology i.e., Harris Technology and Summit Resources go up and down completely randomly.
Pair Corralation between Harris Technology and Summit Resources
Assuming the 90 days trading horizon Harris Technology is expected to generate 26.76 times less return on investment than Summit Resources. But when comparing it to its historical volatility, Harris Technology Group is 2.97 times less risky than Summit Resources. It trades about 0.0 of its potential returns per unit of risk. Summit Resources Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4.97 in Summit Resources Limited on September 1, 2024 and sell it today you would lose (3.67) from holding Summit Resources Limited or give up 73.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.82% |
| Values | Daily Returns |
Harris Technology Group vs. Summit Resources Limited
Performance |
| Timeline |
| Harris Technology |
| Summit Resources |
Harris Technology and Summit Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harris Technology and Summit Resources
The main advantage of trading using opposite Harris Technology and Summit Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harris Technology position performs unexpectedly, Summit 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 Summit Resources will offset losses from the drop in Summit Resources' long position.| Harris Technology vs. Regal Investment | Harris Technology vs. Dexus Convenience Retail | Harris Technology vs. EMvision Medical Devices | Harris Technology vs. Alternative Investment Trust |
| Summit Resources vs. Northern Star Resources | Summit Resources vs. Evolution Mining | Summit Resources vs. Bluescope Steel | Summit Resources vs. Sandfire Resources NL |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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