Correlation Between Hammond Manufacturing and DIRTT Environmental
Can any of the company-specific risk be diversified away by investing in both Hammond Manufacturing and DIRTT Environmental 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 Hammond Manufacturing and DIRTT Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hammond Manufacturing and DIRTT Environmental Solutions, you can compare the effects of market volatilities on Hammond Manufacturing and DIRTT Environmental 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 Hammond Manufacturing with a short position of DIRTT Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammond Manufacturing and DIRTT Environmental.
Diversification Opportunities for Hammond Manufacturing and DIRTT Environmental
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hammond and DIRTT is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hammond Manufacturing and DIRTT Environmental Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIRTT Environmental and Hammond Manufacturing 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 Hammond Manufacturing are associated (or correlated) with DIRTT Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIRTT Environmental has no effect on the direction of Hammond Manufacturing i.e., Hammond Manufacturing and DIRTT Environmental go up and down completely randomly.
Pair Corralation between Hammond Manufacturing and DIRTT Environmental
Assuming the 90 days trading horizon Hammond Manufacturing is expected to generate 1.15 times less return on investment than DIRTT Environmental. But when comparing it to its historical volatility, Hammond Manufacturing is 2.63 times less risky than DIRTT Environmental. It trades about 0.29 of its potential returns per unit of risk. DIRTT Environmental Solutions is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 76.00 in DIRTT Environmental Solutions on August 15, 2025 and sell it today you would earn a total of 23.00 from holding DIRTT Environmental Solutions or generate 30.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hammond Manufacturing vs. DIRTT Environmental Solutions
Performance |
| Timeline |
| Hammond Manufacturing |
| DIRTT Environmental |
Hammond Manufacturing and DIRTT Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hammond Manufacturing and DIRTT Environmental
The main advantage of trading using opposite Hammond Manufacturing and DIRTT Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hammond Manufacturing position performs unexpectedly, DIRTT Environmental 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 DIRTT Environmental will offset losses from the drop in DIRTT Environmental's long position.| Hammond Manufacturing vs. FuelPositive Corp | Hammond Manufacturing vs. Data Communications Management | Hammond Manufacturing vs. Decisive Dividend Corp | Hammond Manufacturing vs. Tantalus Systems Holding |
| DIRTT Environmental vs. ADF Group | DIRTT Environmental vs. Decisive Dividend Corp | DIRTT Environmental vs. Tantalus Systems Holding | DIRTT Environmental vs. Hammond Manufacturing |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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