Correlation Between Broadridge Financial and Hammerson PLC

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

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

Diversification Opportunities for Broadridge Financial and Hammerson PLC

0.55

Correlation Coefficient

Broadridge Financial  Hammerson PLC

Very weak diversification

The 3 months correlation between Broadridge and Hammerson is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Broadridge Financial Solutions and Hammerson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammerson PLC and Broadridge Financial 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 Broadridge Financial Solutions 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 Broadridge Financial i.e., Broadridge Financial and Hammerson PLC go up and down completely randomly.

Pair Corralation between Broadridge Financial and Hammerson PLC

Assuming the 90 days trading horizon Broadridge Financial is expected to generate 5.55 times less return on investment than Hammerson PLC. But when comparing it to its historical volatility, Broadridge Financial Solutions is 1.2 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 0.22 of returns per unit of risk over similar time horizon. If you would invest  25,040  in Hammerson PLC on April 25, 2025 and sell it today you would earn a total of  5,080  from holding Hammerson PLC or generate 20.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Broadridge Financial Solutions  vs.  Hammerson PLC

Broadridge Financial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Broadridge Financial Solutions are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Broadridge Financial is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Hammerson PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hammerson PLC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hammerson PLC unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Broadridge Financial and Hammerson PLC

The main advantage of trading using opposite Broadridge Financial and Hammerson PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadridge Financial 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 Broadridge Financial Solutions 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.