Correlation Between Workspace Group and Hammerson PLC
Can any of the company-specific risk be diversified away by investing in both Workspace Group 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 Workspace Group and Hammerson PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workspace Group PLC and Hammerson PLC, you can compare the effects of market volatilities on Workspace Group 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 Workspace Group with a short position of Hammerson PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workspace Group and Hammerson PLC.
Diversification Opportunities for Workspace Group and Hammerson PLC
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Workspace and Hammerson is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Workspace Group PLC and Hammerson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammerson PLC and Workspace Group 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 Workspace Group PLC 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 Workspace Group i.e., Workspace Group and Hammerson PLC go up and down completely randomly.
Pair Corralation between Workspace Group and Hammerson PLC
Assuming the 90 days trading horizon Workspace Group PLC is expected to generate 1.09 times more return on investment than Hammerson PLC. However, Workspace Group is 1.09 times more volatile than Hammerson PLC. It trades about 0.06 of its potential returns per unit of risk. Hammerson PLC is currently generating about 0.07 per unit of risk. If you would invest 55,300 in Workspace Group PLC on September 1, 2024 and sell it today you would earn a total of 1,000.00 from holding Workspace Group PLC or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Workspace Group PLC vs. Hammerson PLC
Performance |
| Timeline |
| Workspace Group PLC |
| Hammerson PLC |
Workspace Group and Hammerson PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workspace Group and Hammerson PLC
The main advantage of trading using opposite Workspace Group and Hammerson PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workspace Group 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.| Workspace Group vs. Sparebank 1 SR | Workspace Group vs. Virgin Wines UK | Workspace Group vs. JLEN Environmental Assets | Workspace Group vs. Impax Environmental Markets |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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