Correlation Between Vukile Property and Hammerson PLC

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

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

Diversification Opportunities for Vukile Property and Hammerson PLC

0.3

Correlation Coefficient

Vukile Property  Hammerson PLC

Weak diversification

The 3 months correlation between Vukile and Hammerson is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Vukile Property and Hammerson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammerson PLC and Vukile Property 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 Vukile Property are associated (or correlated) with Hammerson PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammerson PLC has no effect on the direction of Vukile Property i.e., Vukile Property and Hammerson PLC go up and down completely randomly.

Pair Corralation between Vukile Property and Hammerson PLC

Assuming the 90 days trading horizon Vukile Property is expected to generate 240.11 times less return on investment than Hammerson PLC. But when comparing it to its historical volatility, Vukile Property is 94.45 times less risky than Hammerson PLC. It trades about 0.05 of its potential returns per unit of risk. Hammerson PLC is currently generating about 0.13 of returns per unit of risk over similar time horizon. 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vukile Property  vs.  Hammerson PLC

Vukile Property

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vukile Property are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Vukile Property is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Vukile Property and Hammerson PLC

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

The idea behind Vukile Property and Hammerson PLC 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.