Correlation Between Hawsons Iron and Ragnar Metals

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

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

Diversification Opportunities for Hawsons Iron and Ragnar Metals

0.69

Correlation Coefficient

Hawsons Iron  Ragnar Metals

Poor diversification

The 3 months correlation between Hawsons and Ragnar is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hawsons Iron and Ragnar Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ragnar Metals and Hawsons Iron 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 Hawsons Iron are associated (or correlated) with Ragnar Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ragnar Metals has no effect on the direction of Hawsons Iron i.e., Hawsons Iron and Ragnar Metals go up and down completely randomly.

Pair Corralation between Hawsons Iron and Ragnar Metals

Assuming the 90 days trading horizon Hawsons Iron is expected to under-perform the Ragnar Metals. In addition to that, Hawsons Iron is 1.22 times more volatile than Ragnar Metals. It trades about -0.01 of its total potential returns per unit of risk. Ragnar Metals is currently generating about 0.06 per unit of volatility. If you would invest  1.90  in Ragnar Metals on December 24, 2024 and sell it today you would earn a total of  0.20  from holding Ragnar Metals or generate 10.53% return on investment over 90 days.

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

Hawsons Iron  vs.  Ragnar Metals

Hawsons Iron

Risk-Adjusted Performance

Very Weak

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

Ragnar Metals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ragnar Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Ragnar Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hawsons Iron and Ragnar Metals

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

The idea behind Hawsons Iron and Ragnar Metals 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.