Correlation Between Hansen Technologies and Techgen Metals

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

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

Diversification Opportunities for Hansen Technologies and Techgen Metals

-0.46

Correlation Coefficient

Hansen Technologies  Techgen Metals

Very good diversification

The 3 months correlation between Hansen and Techgen is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hansen Technologies and Techgen Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techgen Metals and Hansen Technologies 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 Hansen Technologies are associated (or correlated) with Techgen Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techgen Metals has no effect on the direction of Hansen Technologies i.e., Hansen Technologies and Techgen Metals go up and down completely randomly.

Pair Corralation between Hansen Technologies and Techgen Metals

Assuming the 90 days trading horizon Hansen Technologies is expected to generate 0.36 times more return on investment than Techgen Metals. However, Hansen Technologies is 2.79 times less risky than Techgen Metals. It trades about 0.2 of its potential returns per unit of risk. Techgen Metals is currently generating about -0.01 per unit of risk. If you would invest  430.00  in Hansen Technologies on September 18, 2024 and sell it today you would earn a total of  105.00  from holding Hansen Technologies or generate 24.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hansen Technologies  vs.  Techgen Metals

Hansen Technologies

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hansen Technologies are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hansen Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Techgen Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Techgen Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Techgen Metals 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 Hansen Technologies and Techgen Metals

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

The idea behind Hansen Technologies and Techgen 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.