Correlation Between Can Fin and HMT

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

By analyzing existing cross correlation between Can Fin Homes and HMT Limited, you can compare the effects of market volatilities on Can Fin and HMT 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 Can Fin with a short position of HMT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Can Fin and HMT.

Diversification Opportunities for Can Fin and HMT

0.39

Correlation Coefficient

Can Fin  HMT

Weak diversification

The 3 months correlation between Can and HMT is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Can Fin Homes and HMT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMT Limited and Can Fin 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 Can Fin Homes are associated (or correlated) with HMT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMT Limited has no effect on the direction of Can Fin i.e., Can Fin and HMT go up and down completely randomly.

Pair Corralation between Can Fin and HMT

Assuming the 90 days trading horizon Can Fin Homes is expected to generate 0.79 times more return on investment than HMT. However, Can Fin Homes is 1.27 times less risky than HMT. It trades about -0.05 of its potential returns per unit of risk. HMT Limited is currently generating about -0.17 per unit of risk. If you would invest  72,640  in Can Fin Homes on December 23, 2024 and sell it today you would lose (5,075) from holding Can Fin Homes or give up 6.99% of portfolio value over 90 days.

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

Can Fin Homes  vs.  HMT Limited

Can Fin Homes

Risk-Adjusted Performance

Very Weak

Over the last 90 days Can Fin Homes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Can Fin is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

HMT Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days HMT Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Can Fin and HMT

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

The idea behind Can Fin Homes and HMT Limited 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.