Correlation Between Impax Asset and Hammerson PLC
Can any of the company-specific risk be diversified away by investing in both Impax Asset and Hammerson PLC 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 Impax Asset and Hammerson PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Asset Management and Hammerson PLC, you can compare the effects of market volatilities on Impax Asset and Hammerson PLC 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 Impax Asset with a short position of Hammerson PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and Hammerson PLC.
Diversification Opportunities for Impax Asset and Hammerson PLC
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Impax and Hammerson is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and Hammerson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammerson PLC and Impax Asset 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 Impax Asset Management are associated (or correlated) with Hammerson PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammerson PLC has no effect on the direction of Impax Asset i.e., Impax Asset and Hammerson PLC go up and down completely randomly.
Pair Corralation between Impax Asset and Hammerson PLC
Assuming the 90 days trading horizon Impax Asset Management is expected to under-perform the Hammerson PLC. In addition to that, Impax Asset is 1.3 times more volatile than Hammerson PLC. It trades about -0.07 of its total potential returns per unit of risk. Hammerson PLC is currently generating about 0.01 per unit of volatility. If you would invest 26,040 in Hammerson PLC on October 13, 2024 and sell it today you would earn a total of 800.00 from holding Hammerson PLC or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Impax Asset Management vs. Hammerson PLC
Performance |
| Timeline |
| Impax Asset Management |
| Hammerson PLC |
Impax Asset and Hammerson PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Asset and Hammerson PLC
The main advantage of trading using opposite Impax Asset and Hammerson PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Asset position performs unexpectedly, Hammerson PLC 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 Hammerson PLC will offset losses from the drop in Hammerson PLC's long position.| Impax Asset vs. Air Products Chemicals | Impax Asset vs. Futura Medical | Impax Asset vs. Nordea Bank Abp | Impax Asset vs. Tetragon Financial Group |
| Hammerson PLC vs. Impax Asset Management | Hammerson PLC vs. St Galler Kantonalbank | Hammerson PLC vs. Elmos Semiconductor SE | Hammerson PLC vs. Metro Bank PLC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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