Correlation Between Aave and Hammer Metals
Can any of the company-specific risk be diversified away by investing in both Aave and Hammer Metals 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 Aave and Hammer Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aave and Hammer Metals Limited, you can compare the effects of market volatilities on Aave and Hammer Metals 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 Aave with a short position of Hammer Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aave and Hammer Metals.
Diversification Opportunities for Aave and Hammer Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aave and Hammer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aave and Hammer Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammer Metals Limited and Aave 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 Aave are associated (or correlated) with Hammer Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammer Metals Limited has no effect on the direction of Aave i.e., Aave and Hammer Metals go up and down completely randomly.
Pair Corralation between Aave and Hammer Metals
If you would invest 6,059 in Aave on January 25, 2024 and sell it today you would earn a total of 3,408 from holding Aave or generate 56.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.42% |
Values | Daily Returns |
Aave vs. Hammer Metals Limited
Performance |
Timeline |
Aave |
Hammer Metals Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aave and Hammer Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aave and Hammer Metals
The main advantage of trading using opposite Aave and Hammer Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aave position performs unexpectedly, Hammer Metals 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 Hammer Metals will offset losses from the drop in Hammer Metals' long position.The idea behind Aave and Hammer Metals Limited 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.Hammer Metals vs. Oatly Group AB | Hammer Metals vs. Tesla Inc | Hammer Metals vs. Visteon Corp | Hammer Metals vs. Griffon |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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