Correlation Between Hammer Metals and REGAL ASIAN

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

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

Diversification Opportunities for Hammer Metals and REGAL ASIAN

0.07

Correlation Coefficient

Hammer Metals  REGAL ASIAN

Significant diversification

The 3 months correlation between Hammer and REGAL is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hammer Metals and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS and Hammer Metals 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 Hammer Metals are associated (or correlated) with REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of Hammer Metals i.e., Hammer Metals and REGAL ASIAN go up and down completely randomly.

Pair Corralation between Hammer Metals and REGAL ASIAN

Assuming the 90 days trading horizon Hammer Metals is expected to generate 2.18 times less return on investment than REGAL ASIAN. In addition to that, Hammer Metals is 2.82 times more volatile than REGAL ASIAN INVESTMENTS. It trades about 0.01 of its total potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about 0.06 per unit of volatility. If you would invest  191.00  in REGAL ASIAN INVESTMENTS on December 21, 2024 and sell it today you would earn a total of  9.00  from holding REGAL ASIAN INVESTMENTS or generate 4.71% return on investment over 90 days.

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

Hammer Metals  vs.  REGAL ASIAN INVESTMENTS

Hammer Metals

Risk-Adjusted Performance

Very Weak

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

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in REGAL ASIAN INVESTMENTS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, REGAL ASIAN is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hammer Metals and REGAL ASIAN

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

The idea behind Hammer Metals and REGAL ASIAN INVESTMENTS 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.