Correlation Between Pact Group and Hansen Technologies
Can any of the company-specific risk be diversified away by investing in both Pact Group and Hansen Technologies 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 Pact Group and Hansen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pact Group Holdings and Hansen Technologies, you can compare the effects of market volatilities on Pact Group and Hansen Technologies 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 Pact Group with a short position of Hansen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pact Group and Hansen Technologies.
Diversification Opportunities for Pact Group and Hansen Technologies
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pact and Hansen is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Pact Group Holdings and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies and Pact Group 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 Pact Group Holdings are associated (or correlated) with Hansen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansen Technologies has no effect on the direction of Pact Group i.e., Pact Group and Hansen Technologies go up and down completely randomly.
Pair Corralation between Pact Group and Hansen Technologies
Assuming the 90 days trading horizon Pact Group Holdings is expected to generate 2.0 times more return on investment than Hansen Technologies. However, Pact Group is 2.0 times more volatile than Hansen Technologies. It trades about 0.2 of its potential returns per unit of risk. Hansen Technologies is currently generating about -0.11 per unit of risk. If you would invest 81.00 in Pact Group Holdings on December 3, 2024 and sell it today you would earn a total of 36.00 from holding Pact Group Holdings or generate 44.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
Pact Group Holdings vs. Hansen Technologies
Performance |
Timeline |
Pact Group Holdings |
Hansen Technologies |
Pact Group and Hansen Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pact Group and Hansen Technologies
The main advantage of trading using opposite Pact Group and Hansen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pact Group position performs unexpectedly, Hansen Technologies 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 Hansen Technologies will offset losses from the drop in Hansen Technologies' long position.Pact Group vs. Sports Entertainment Group | Pact Group vs. Pinnacle Investment Management | Pact Group vs. Microequities Asset Management | Pact Group vs. Spirit Telecom |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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