Correlation Between Birchcliff Energy and Hamilton Lane

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

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

Diversification Opportunities for Birchcliff Energy and Hamilton Lane

-0.21

Correlation Coefficient

Birchcliff Energy  Hamilton Lane

Very good diversification

The 3 months correlation between Birchcliff and Hamilton is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Birchcliff Energy and Hamilton Lane Private in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Lane Private and Birchcliff Energy 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 Birchcliff Energy are associated (or correlated) with Hamilton Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Lane Private has no effect on the direction of Birchcliff Energy i.e., Birchcliff Energy and Hamilton Lane go up and down completely randomly.

Pair Corralation between Birchcliff Energy and Hamilton Lane

If you would invest  533.00  in Birchcliff Energy on January 17, 2024 and sell it today you would earn a total of  5.00  from holding Birchcliff Energy or generate 0.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Birchcliff Energy  vs.  Hamilton Lane Private

Birchcliff Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Birchcliff Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Birchcliff Energy is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Hamilton Lane Private

Risk-Adjusted Performance

0 of 100

Excellent

Over the last 90 days Hamilton Lane Private has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak forward indicators, Hamilton Lane showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Birchcliff Energy and Hamilton Lane

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

The idea behind Birchcliff Energy and Hamilton Lane Private 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.