Correlation Between Hammerson PLC and Bank of Georgia
Can any of the company-specific risk be diversified away by investing in both Hammerson PLC and Bank of Georgia 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 Hammerson PLC and Bank of Georgia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hammerson PLC and Bank of Georgia, you can compare the effects of market volatilities on Hammerson PLC and Bank of Georgia 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 Hammerson PLC with a short position of Bank of Georgia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammerson PLC and Bank of Georgia.
Diversification Opportunities for Hammerson PLC and Bank of Georgia
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hammerson and Bank is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hammerson PLC and Bank of Georgia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Georgia and Hammerson PLC 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 Hammerson PLC are associated (or correlated) with Bank of Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Georgia has no effect on the direction of Hammerson PLC i.e., Hammerson PLC and Bank of Georgia go up and down completely randomly.
Pair Corralation between Hammerson PLC and Bank of Georgia
Assuming the 90 days trading horizon Hammerson PLC is expected to generate 0.82 times more return on investment than Bank of Georgia. However, Hammerson PLC is 1.22 times less risky than Bank of Georgia. It trades about -0.16 of its potential returns per unit of risk. Bank of Georgia is currently generating about -0.21 per unit of risk. If you would invest 28,880 in Hammerson PLC on September 25, 2024 and sell it today you would lose (1,360) from holding Hammerson PLC or give up 4.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hammerson PLC vs. Bank of Georgia
Performance |
Timeline |
Hammerson PLC |
Bank of Georgia |
Hammerson PLC and Bank of Georgia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hammerson PLC and Bank of Georgia
The main advantage of trading using opposite Hammerson PLC and Bank of Georgia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hammerson PLC position performs unexpectedly, Bank of Georgia 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 Bank of Georgia will offset losses from the drop in Bank of Georgia's long position.Hammerson PLC vs. Derwent London PLC | Hammerson PLC vs. Workspace Group PLC | Hammerson PLC vs. Supermarket Income REIT | Hammerson PLC vs. Digital Realty Trust |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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