Correlation Between Olympia Financial and Hampton Financial
Can any of the company-specific risk be diversified away by investing in both Olympia Financial 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 Olympia Financial and Hampton Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympia Financial Group and Hampton Financial Corp, you can compare the effects of market volatilities on Olympia Financial 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 Olympia Financial with a short position of Hampton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympia Financial and Hampton Financial.
Diversification Opportunities for Olympia Financial and Hampton Financial
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Olympia and Hampton is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Olympia Financial Group 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 Olympia 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 Olympia Financial Group 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 Olympia Financial i.e., Olympia Financial and Hampton Financial go up and down completely randomly.
Pair Corralation between Olympia Financial and Hampton Financial
Assuming the 90 days trading horizon Olympia Financial Group is expected to generate 0.55 times more return on investment than Hampton Financial. However, Olympia Financial Group is 1.81 times less risky than Hampton Financial. It trades about 0.09 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 9,849 in Olympia Financial Group on November 2, 2024 and sell it today you would earn a total of 1,051 from holding Olympia Financial Group or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympia Financial Group vs. Hampton Financial Corp
Performance |
| Timeline |
| Olympia Financial |
| Hampton Financial Corp |
Olympia Financial and Hampton Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympia Financial and Hampton Financial
The main advantage of trading using opposite Olympia Financial and Hampton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympia Financial 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.| Olympia Financial vs. Firm Capital Mortgage | Olympia Financial vs. Atrium Mortgage Investment | Olympia Financial vs. MCAN Mortgage | Olympia Financial vs. Accord Financial Corp |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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