Correlation Between Hastings Technology and C PARAN

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

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

Diversification Opportunities for Hastings Technology and C PARAN

-0.32

Correlation Coefficient

Hastings Technology  C PARAN

Very good diversification

The 3 months correlation between Hastings and ELP1 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hastings Technology Metals and C PARAN EN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C PARAN EN and Hastings Technology 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 Hastings Technology Metals are associated (or correlated) with C PARAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C PARAN EN has no effect on the direction of Hastings Technology i.e., Hastings Technology and C PARAN go up and down completely randomly.

Pair Corralation between Hastings Technology and C PARAN

Assuming the 90 days horizon Hastings Technology Metals is expected to generate 2.88 times more return on investment than C PARAN. However, Hastings Technology is 2.88 times more volatile than C PARAN EN. It trades about 0.12 of its potential returns per unit of risk. C PARAN EN is currently generating about -0.07 per unit of risk. If you would invest  14.00  in Hastings Technology Metals on September 23, 2024 and sell it today you would earn a total of  6.00  from holding Hastings Technology Metals or generate 42.86% return on investment over 90 days.

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

Hastings Technology Metals  vs.  C PARAN EN

Hastings Technology

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hastings Technology Metals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hastings Technology reported solid returns over the last few months and may actually be approaching a breakup point.

C PARAN EN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C PARAN EN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Hastings Technology and C PARAN

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

The idea behind Hastings Technology Metals and C PARAN EN 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.