Correlation Between Hampton Financial and Diamond Estates
Can any of the company-specific risk be diversified away by investing in both Hampton Financial and Diamond Estates 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 Hampton Financial and Diamond Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hampton Financial Corp and Diamond Estates Wines, you can compare the effects of market volatilities on Hampton Financial and Diamond Estates 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 Hampton Financial with a short position of Diamond Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hampton Financial and Diamond Estates.
Diversification Opportunities for Hampton Financial and Diamond Estates
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hampton and Diamond is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hampton Financial Corp and Diamond Estates Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Estates Wines and Hampton 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 Hampton Financial Corp are associated (or correlated) with Diamond Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Estates Wines has no effect on the direction of Hampton Financial i.e., Hampton Financial and Diamond Estates go up and down completely randomly.
Pair Corralation between Hampton Financial and Diamond Estates
Assuming the 90 days horizon Hampton Financial Corp is expected to under-perform the Diamond Estates. But the stock apears to be less risky and, when comparing its historical volatility, Hampton Financial Corp is 2.38 times less risky than Diamond Estates. The stock trades about -0.02 of its potential returns per unit of risk. The Diamond Estates Wines is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Diamond Estates Wines on September 25, 2024 and sell it today you would lose (4.00) from holding Diamond Estates Wines or give up 16.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hampton Financial Corp vs. Diamond Estates Wines
Performance |
Timeline |
Hampton Financial Corp |
Diamond Estates Wines |
Hampton Financial and Diamond Estates Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hampton Financial and Diamond Estates
The main advantage of trading using opposite Hampton Financial and Diamond Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hampton Financial position performs unexpectedly, Diamond Estates 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 Diamond Estates will offset losses from the drop in Diamond Estates' long position.Hampton Financial vs. Diamond Estates Wines | Hampton Financial vs. Tree Island Steel | Hampton Financial vs. NextSource Materials | Hampton Financial vs. Globex Mining Enterprises |
Diamond Estates vs. CI Financial Corp | Diamond Estates vs. Olympia Financial Group | Diamond Estates vs. Financial 15 Split | Diamond Estates vs. Bip Investment Corp |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |