Correlation Between Ten Sixty and Hummingbird Resources

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

By analyzing existing cross correlation between Ten Sixty Four and Hummingbird Resources PLC, you can compare the effects of market volatilities on Ten Sixty and Hummingbird Resources 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 Ten Sixty with a short position of Hummingbird Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ten Sixty and Hummingbird Resources.

Diversification Opportunities for Ten Sixty and Hummingbird Resources

-0.57

Correlation Coefficient

Ten Sixty  Hummingbird Resources

Excellent diversification

The 3 months correlation between Ten and Hummingbird is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ten Sixty Four and Hummingbird Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hummingbird Resources PLC and Ten Sixty 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 Ten Sixty Four are associated (or correlated) with Hummingbird Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hummingbird Resources PLC has no effect on the direction of Ten Sixty i.e., Ten Sixty and Hummingbird Resources go up and down completely randomly.

Pair Corralation between Ten Sixty and Hummingbird Resources

If you would invest  2.50  in Hummingbird Resources PLC on December 29, 2024 and sell it today you would earn a total of  0.60  from holding Hummingbird Resources PLC or generate 24.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Ten Sixty Four  vs.  Hummingbird Resources PLC

Ten Sixty Four

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ten Sixty Four has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Ten Sixty is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Hummingbird Resources PLC

Risk-Adjusted Performance

OK

Over the last 90 days Hummingbird Resources PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Hummingbird Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ten Sixty and Hummingbird Resources

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

The idea behind Ten Sixty Four and Hummingbird Resources 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.