Correlation Between Morguard Real and Hampton Financial
Can any of the company-specific risk be diversified away by investing in both Morguard Real and Hampton Financial 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 Morguard Real and Hampton Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morguard Real Estate and Hampton Financial Corp, you can compare the effects of market volatilities on Morguard Real and Hampton Financial 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 Morguard Real with a short position of Hampton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morguard Real and Hampton Financial.
Diversification Opportunities for Morguard Real and Hampton Financial
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Morguard and Hampton is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Morguard Real Estate and Hampton Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hampton Financial Corp and Morguard Real 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 Morguard Real Estate are associated (or correlated) with Hampton Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hampton Financial Corp has no effect on the direction of Morguard Real i.e., Morguard Real and Hampton Financial go up and down completely randomly.
Pair Corralation between Morguard Real and Hampton Financial
Assuming the 90 days trading horizon Morguard Real Estate is expected to generate 0.44 times more return on investment than Hampton Financial. However, Morguard Real Estate is 2.26 times less risky than Hampton Financial. It trades about 0.04 of its potential returns per unit of risk. Hampton Financial Corp is currently generating about -0.01 per unit of risk. If you would invest 501.00 in Morguard Real Estate on September 14, 2024 and sell it today you would earn a total of 52.00 from holding Morguard Real Estate or generate 10.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.26% |
| Values | Daily Returns |
Morguard Real Estate vs. Hampton Financial Corp
Performance |
| Timeline |
| Morguard Real Estate |
| Hampton Financial Corp |
Morguard Real and Hampton Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morguard Real and Hampton Financial
The main advantage of trading using opposite Morguard Real and Hampton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morguard Real position performs unexpectedly, Hampton Financial 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 Hampton Financial will offset losses from the drop in Hampton Financial's long position.| Morguard Real vs. Canadian Apartment Properties | Morguard Real vs. Granite Real Estate | Morguard Real vs. Choice Properties Real | Morguard Real vs. HR Real Estate |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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