Correlation Between Insignia Financial and Hansen Technologies
Can any of the company-specific risk be diversified away by investing in both Insignia Financial and Hansen Technologies 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 Insignia Financial and Hansen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insignia Financial and Hansen Technologies, you can compare the effects of market volatilities on Insignia Financial and Hansen Technologies 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 Insignia Financial with a short position of Hansen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Financial and Hansen Technologies.
Diversification Opportunities for Insignia Financial and Hansen Technologies
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Insignia and Hansen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies and Insignia Financial 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 Insignia Financial are associated (or correlated) with Hansen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansen Technologies has no effect on the direction of Insignia Financial i.e., Insignia Financial and Hansen Technologies go up and down completely randomly.
Pair Corralation between Insignia Financial and Hansen Technologies
Assuming the 90 days trading horizon Insignia Financial is expected to generate 1.54 times more return on investment than Hansen Technologies. However, Insignia Financial is 1.54 times more volatile than Hansen Technologies. It trades about 0.13 of its potential returns per unit of risk. Hansen Technologies is currently generating about 0.12 per unit of risk. If you would invest 216.00 in Insignia Financial on September 14, 2024 and sell it today you would earn a total of 124.00 from holding Insignia Financial or generate 57.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insignia Financial vs. Hansen Technologies
Performance |
| Timeline |
| Insignia Financial |
| Hansen Technologies |
Insignia Financial and Hansen Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insignia Financial and Hansen Technologies
The main advantage of trading using opposite Insignia Financial and Hansen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia Financial position performs unexpectedly, Hansen Technologies 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 Hansen Technologies will offset losses from the drop in Hansen Technologies' long position.| Insignia Financial vs. Audio Pixels Holdings | Insignia Financial vs. Iodm | Insignia Financial vs. Nsx | Insignia Financial vs. TTG Fintech |
| Hansen Technologies vs. Audio Pixels Holdings | Hansen Technologies vs. Iodm | Hansen Technologies vs. Nsx | Hansen Technologies vs. TTG Fintech |
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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