Correlation Between Visteon Corp and Hamilton Insurance

Can any of the company-specific risk be diversified away by investing in both Visteon Corp and Hamilton Insurance 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 Visteon Corp and Hamilton Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Visteon Corp and Hamilton Insurance Group,, you can compare the effects of market volatilities on Visteon Corp and Hamilton Insurance 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 Visteon Corp with a short position of Hamilton Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visteon Corp and Hamilton Insurance.

Diversification Opportunities for Visteon Corp and Hamilton Insurance

0.33

Correlation Coefficient

Visteon Corp  Hamilton Insurance

Weak diversification

The 3 months correlation between Visteon and Hamilton is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Visteon Corp and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, and Visteon Corp 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 Visteon Corp are associated (or correlated) with Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Visteon Corp i.e., Visteon Corp and Hamilton Insurance go up and down completely randomly.

Pair Corralation between Visteon Corp and Hamilton Insurance

Allowing for the 90-day total investment horizon Visteon Corp is expected to generate 0.95 times more return on investment than Hamilton Insurance. However, Visteon Corp is 1.05 times less risky than Hamilton Insurance. It trades about 0.05 of its potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.03 per unit of risk. If you would invest  8,869  in Visteon Corp on September 12, 2024 and sell it today you would earn a total of  508.00  from holding Visteon Corp or generate 5.73% return on investment over 90 days.

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

Visteon Corp  vs.  Hamilton Insurance Group,

Visteon Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Visteon Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Visteon Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hamilton Insurance Group,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Hamilton Insurance is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Visteon Corp and Hamilton Insurance

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

The idea behind Visteon Corp and Hamilton Insurance Group, 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.