Correlation Between ABERFORTH SMCOS and Hong Kong
Can any of the company-specific risk be diversified away by investing in both ABERFORTH SMCOS and Hong Kong 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 ABERFORTH SMCOS and Hong Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABERFORTH SMCOS TRLS 01 and Hong Kong Exchanges, you can compare the effects of market volatilities on ABERFORTH SMCOS and Hong Kong 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 ABERFORTH SMCOS with a short position of Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABERFORTH SMCOS and Hong Kong.
Diversification Opportunities for ABERFORTH SMCOS and Hong Kong
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABERFORTH and Hong is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ABERFORTH SMCOS TRLS 01 and Hong Kong Exchanges in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Exchanges and ABERFORTH SMCOS 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 ABERFORTH SMCOS TRLS 01 are associated (or correlated) with Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Exchanges has no effect on the direction of ABERFORTH SMCOS i.e., ABERFORTH SMCOS and Hong Kong go up and down completely randomly.
Pair Corralation between ABERFORTH SMCOS and Hong Kong
Assuming the 90 days horizon ABERFORTH SMCOS TRLS 01 is expected to under-perform the Hong Kong. But the stock apears to be less risky and, when comparing its historical volatility, ABERFORTH SMCOS TRLS 01 is 3.68 times less risky than Hong Kong. The stock trades about 0.0 of its potential returns per unit of risk. The Hong Kong Exchanges is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,539 in Hong Kong Exchanges on September 12, 2024 and sell it today you would earn a total of 1,411 from holding Hong Kong Exchanges or generate 55.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABERFORTH SMCOS TRLS 01 vs. Hong Kong Exchanges
Performance |
| Timeline |
| ABERFORTH SMCOS TRLS |
| Hong Kong Exchanges |
ABERFORTH SMCOS and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABERFORTH SMCOS and Hong Kong
The main advantage of trading using opposite ABERFORTH SMCOS and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABERFORTH SMCOS position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| ABERFORTH SMCOS vs. CAREER EDUCATION | ABERFORTH SMCOS vs. LANDSEA GREEN MANAGEMENT | ABERFORTH SMCOS vs. Perdoceo Education | ABERFORTH SMCOS vs. AGF Management Limited |
| Hong Kong vs. Ares Management Corp | Hong Kong vs. Jupiter Fund Management | Hong Kong vs. Brockhaus Capital Management | Hong Kong vs. AGF Management Limited |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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