Correlation Between Technology One and Hammer Metals
Can any of the company-specific risk be diversified away by investing in both Technology One and Hammer Metals 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 Technology One and Hammer Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technology One and Hammer Metals, you can compare the effects of market volatilities on Technology One and Hammer Metals 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 Technology One with a short position of Hammer Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technology One and Hammer Metals.
Diversification Opportunities for Technology One and Hammer Metals
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Technology and Hammer is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Technology One and Hammer Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammer Metals and Technology One 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 Technology One are associated (or correlated) with Hammer Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammer Metals has no effect on the direction of Technology One i.e., Technology One and Hammer Metals go up and down completely randomly.
Pair Corralation between Technology One and Hammer Metals
Assuming the 90 days trading horizon Technology One is expected to generate 0.49 times more return on investment than Hammer Metals. However, Technology One is 2.05 times less risky than Hammer Metals. It trades about 0.19 of its potential returns per unit of risk. Hammer Metals is currently generating about -0.05 per unit of risk. If you would invest 2,607 in Technology One on October 12, 2024 and sell it today you would earn a total of 427.00 from holding Technology One or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Technology One vs. Hammer Metals
Performance |
| Timeline |
| Technology One |
| Hammer Metals |
Technology One and Hammer Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technology One and Hammer Metals
The main advantage of trading using opposite Technology One and Hammer Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technology One position performs unexpectedly, Hammer Metals 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 Hammer Metals will offset losses from the drop in Hammer Metals' long position.| Technology One vs. Tombador Iron | Technology One vs. Pioneer Credit | Technology One vs. Iron Road | Technology One vs. Vulcan Steel |
| Hammer Metals vs. Sandon Capital Investments | Hammer Metals vs. Diversified United Investment | Hammer Metals vs. Carnegie Clean Energy | Hammer Metals vs. Technology One |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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