Correlation Between Hammerson PLC and Sabvest Capital

Can any of the company-specific risk be diversified away by investing in both Hammerson PLC and Sabvest Capital 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 Hammerson PLC and Sabvest Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Hammerson PLC and Sabvest Capital

0.67

Correlation Coefficient

Hammerson PLC  Sabvest Capital

Poor diversification

The 3 months correlation between Hammerson and Sabvest is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hammerson PLC and Sabvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabvest Capital and Hammerson PLC 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 Hammerson PLC are associated (or correlated) with Sabvest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabvest Capital has no effect on the direction of Hammerson PLC i.e., Hammerson PLC and Sabvest Capital go up and down completely randomly.

Pair Corralation between Hammerson PLC and Sabvest Capital

Assuming the 90 days trading horizon Hammerson PLC is expected to generate 47.5 times more return on investment than Sabvest Capital. However, Hammerson PLC is 47.5 times more volatile than Sabvest Capital. It trades about 0.13 of its potential returns per unit of risk. Sabvest Capital is currently generating about 0.13 per unit of risk. If you would invest  66,500  in Hammerson PLC on September 3, 2024 and sell it today you would earn a total of  602,100  from holding Hammerson PLC or generate 905.41% return on investment over 90 days.

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

Hammerson PLC  vs.  Sabvest Capital

Hammerson PLC

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hammerson PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Hammerson PLC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sabvest Capital

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sabvest Capital are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sabvest Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hammerson PLC and Sabvest Capital

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

The idea behind Hammerson PLC and Sabvest Capital 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.