Correlation Between Hammer Metals and Suncorp

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

By analyzing existing cross correlation between Hammer Metals and Suncorp Group, you can compare the effects of market volatilities on Hammer Metals and Suncorp 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 Suncorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammer Metals and Suncorp.

Diversification Opportunities for Hammer Metals and Suncorp

-0.74

Correlation Coefficient

Hammer Metals  Suncorp

Pay attention - limited upside

The 3 months correlation between Hammer and Suncorp is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hammer Metals and Suncorp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncorp Group 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 Suncorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suncorp Group has no effect on the direction of Hammer Metals i.e., Hammer Metals and Suncorp go up and down completely randomly.

Pair Corralation between Hammer Metals and Suncorp

Assuming the 90 days trading horizon Hammer Metals is expected to under-perform the Suncorp. In addition to that, Hammer Metals is 3.54 times more volatile than Suncorp Group. It trades about -0.11 of its total potential returns per unit of risk. Suncorp Group is currently generating about 0.11 per unit of volatility. If you would invest  1,818  in Suncorp Group on October 23, 2024 and sell it today you would earn a total of  150.00  from holding Suncorp Group or generate 8.25% return on investment over 90 days.

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

Hammer Metals  vs.  Suncorp Group

Hammer Metals

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Suncorp Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Suncorp Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Suncorp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hammer Metals and Suncorp

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

The idea behind Hammer Metals and Suncorp Group 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.