Correlation Between Silver Bear and Hampton Financial

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

By analyzing existing cross correlation between Silver Bear Resources and Hampton Financial Corp, you can compare the effects of market volatilities on Silver Bear and Hampton Financial 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 Silver Bear with a short position of Hampton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Bear and Hampton Financial.

Diversification Opportunities for Silver Bear and Hampton Financial

0.0

Correlation Coefficient

Silver Bear  Hampton Financial

Pay attention - limited upside

The 3 months correlation between Silver and Hampton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Silver Bear Resources and Hampton Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hampton Financial Corp and Silver Bear 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 Silver Bear Resources are associated (or correlated) with Hampton Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hampton Financial Corp has no effect on the direction of Silver Bear i.e., Silver Bear and Hampton Financial go up and down completely randomly.

Pair Corralation between Silver Bear and Hampton Financial

If you would invest  5.00  in Silver Bear Resources on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Silver Bear Resources or generate 0.0% return on investment over 90 days.

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

Silver Bear Resources  vs.  Hampton Financial Corp

Silver Bear Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Bear Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Silver Bear is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Hampton Financial Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hampton Financial Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Hampton Financial is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Silver Bear and Hampton Financial

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

The idea behind Silver Bear Resources and Hampton Financial Corp 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.