Correlation Between Hammerson PLC and M Winkworth

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

By analyzing existing cross correlation between Hammerson PLC and M Winkworth PLC, you can compare the effects of market volatilities on Hammerson PLC and M Winkworth 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 M Winkworth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammerson PLC and M Winkworth.

Diversification Opportunities for Hammerson PLC and M Winkworth

-0.44

Correlation Coefficient

Hammerson PLC  M Winkworth

Very good diversification

The 3 months correlation between Hammerson and WINK is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hammerson PLC and M Winkworth PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Winkworth PLC 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 M Winkworth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Winkworth PLC has no effect on the direction of Hammerson PLC i.e., Hammerson PLC and M Winkworth go up and down completely randomly.

Pair Corralation between Hammerson PLC and M Winkworth

Assuming the 90 days trading horizon Hammerson PLC is expected to under-perform the M Winkworth. But the stock apears to be less risky and, when comparing its historical volatility, Hammerson PLC is 1.2 times less risky than M Winkworth. The stock trades about -0.08 of its potential returns per unit of risk. The M Winkworth PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  19,500  in M Winkworth PLC on October 25, 2024 and sell it today you would earn a total of  500.00  from holding M Winkworth PLC or generate 2.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Hammerson PLC  vs.  M Winkworth PLC

Hammerson PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hammerson PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

M Winkworth PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in M Winkworth PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, M Winkworth is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hammerson PLC and M Winkworth

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

The idea behind Hammerson PLC and M Winkworth PLC 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .