Correlation Between Australia and Hansen Technologies

Can any of the company-specific risk be diversified away by investing in both Australia and Hansen Technologies 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 Australia and Hansen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Australia and New and Hansen Technologies, you can compare the effects of market volatilities on Australia and Hansen Technologies 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 Australia with a short position of Hansen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australia and Hansen Technologies.

Diversification Opportunities for Australia and Hansen Technologies

0.35

Correlation Coefficient

Australia  Hansen Technologies

Weak diversification

The 3 months correlation between Australia and Hansen is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Australia and New and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies and Australia 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 Australia and New are associated (or correlated) with Hansen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansen Technologies has no effect on the direction of Australia i.e., Australia and Hansen Technologies go up and down completely randomly.

Pair Corralation between Australia and Hansen Technologies

Assuming the 90 days trading horizon Australia and New is expected to under-perform the Hansen Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Australia and New is 1.23 times less risky than Hansen Technologies. The stock trades about -0.18 of its potential returns per unit of risk. The Hansen Technologies is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  559.00  in Hansen Technologies on October 9, 2024 and sell it today you would lose (22.00) from holding Hansen Technologies or give up 3.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Australia and New  vs.  Hansen Technologies

Australia and New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Australia and New has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Australia is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Hansen Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hansen Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hansen Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Australia and Hansen Technologies

The main advantage of trading using opposite Australia and Hansen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australia position performs unexpectedly, Hansen Technologies 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 Hansen Technologies will offset losses from the drop in Hansen Technologies' long position.

The idea behind Australia and New and Hansen Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.