Correlation Between Adriatic Metals and Hutchison Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals and Hutchison Telecommunicatio 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 Adriatic Metals and Hutchison Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adriatic Metals Plc and Hutchison Telecommunications, you can compare the effects of market volatilities on Adriatic Metals and Hutchison Telecommunicatio 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 Adriatic Metals with a short position of Hutchison Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and Hutchison Telecommunicatio.
Diversification Opportunities for Adriatic Metals and Hutchison Telecommunicatio
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adriatic and Hutchison is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals Plc and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio and Adriatic Metals 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 Adriatic Metals Plc are associated (or correlated) with Hutchison Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hutchison Telecommunicatio has no effect on the direction of Adriatic Metals i.e., Adriatic Metals and Hutchison Telecommunicatio go up and down completely randomly.
Pair Corralation between Adriatic Metals and Hutchison Telecommunicatio
Assuming the 90 days trading horizon Adriatic Metals Plc is expected to generate 0.54 times more return on investment than Hutchison Telecommunicatio. However, Adriatic Metals Plc is 1.87 times less risky than Hutchison Telecommunicatio. It trades about 0.05 of its potential returns per unit of risk. Hutchison Telecommunications is currently generating about 0.01 per unit of risk. If you would invest 287.00 in Adriatic Metals Plc on September 2, 2024 and sell it today you would earn a total of 130.00 from holding Adriatic Metals Plc or generate 45.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adriatic Metals Plc vs. Hutchison Telecommunications
Performance |
| Timeline |
| Adriatic Metals Plc |
| Hutchison Telecommunicatio |
Adriatic Metals and Hutchison Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adriatic Metals and Hutchison Telecommunicatio
The main advantage of trading using opposite Adriatic Metals and Hutchison Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals position performs unexpectedly, Hutchison Telecommunicatio 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 Hutchison Telecommunicatio will offset losses from the drop in Hutchison Telecommunicatio's long position.| Adriatic Metals vs. National Storage REIT | Adriatic Metals vs. Dicker Data | Adriatic Metals vs. Clime Investment Management | Adriatic Metals vs. Microequities Asset Management |
| Hutchison Telecommunicatio vs. Skycity Entertainment Group | Hutchison Telecommunicatio vs. Collins Foods | Hutchison Telecommunicatio vs. Gold Road Resources | Hutchison Telecommunicatio vs. Iron Road |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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