Correlation Between SWISS WATER and HK Electric
Can any of the company-specific risk be diversified away by investing in both SWISS WATER and HK Electric 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 SWISS WATER and HK Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and HK Electric Investments, you can compare the effects of market volatilities on SWISS WATER and HK Electric 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 SWISS WATER with a short position of HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and HK Electric.
Diversification Opportunities for SWISS WATER and HK Electric
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SWISS and HKT is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric Investments and SWISS WATER 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 SWISS WATER DECAFFCOFFEE are associated (or correlated) with HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of SWISS WATER i.e., SWISS WATER and HK Electric go up and down completely randomly.
Pair Corralation between SWISS WATER and HK Electric
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to under-perform the HK Electric. In addition to that, SWISS WATER is 9.77 times more volatile than HK Electric Investments. It trades about -0.14 of its total potential returns per unit of risk. HK Electric Investments is currently generating about -0.23 per unit of volatility. If you would invest 65.00 in HK Electric Investments on October 26, 2024 and sell it today you would lose (1.00) from holding HK Electric Investments or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. HK Electric Investments
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| HK Electric Investments |
SWISS WATER and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and HK Electric
The main advantage of trading using opposite SWISS WATER and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric's long position.| SWISS WATER vs. IDP EDUCATION LTD | SWISS WATER vs. STRAYER EDUCATION | SWISS WATER vs. Adtalem Global Education | SWISS WATER vs. EEDUCATION ALBERT AB |
| HK Electric vs. PARKEN Sport Entertainment | HK Electric vs. GigaMedia | HK Electric vs. SWISS WATER DECAFFCOFFEE | HK Electric vs. BJs Restaurants |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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