Correlation Between AiMedia Technologies and Hutchison Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both AiMedia Technologies 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 AiMedia Technologies and Hutchison Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AiMedia Technologies and Hutchison Telecommunications, you can compare the effects of market volatilities on AiMedia Technologies 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 AiMedia Technologies with a short position of Hutchison Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of AiMedia Technologies and Hutchison Telecommunicatio.
Diversification Opportunities for AiMedia Technologies and Hutchison Telecommunicatio
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AiMedia and Hutchison is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding AiMedia Technologies and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio and AiMedia Technologies 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 AiMedia Technologies 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 AiMedia Technologies i.e., AiMedia Technologies and Hutchison Telecommunicatio go up and down completely randomly.
Pair Corralation between AiMedia Technologies and Hutchison Telecommunicatio
Assuming the 90 days trading horizon AiMedia Technologies is expected to generate 0.74 times more return on investment than Hutchison Telecommunicatio. However, AiMedia Technologies is 1.34 times less risky than Hutchison Telecommunicatio. It trades about 0.06 of its potential returns per unit of risk. Hutchison Telecommunications is currently generating about -0.01 per unit of risk. If you would invest 33.00 in AiMedia Technologies on August 29, 2024 and sell it today you would earn a total of 44.00 from holding AiMedia Technologies or generate 133.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AiMedia Technologies vs. Hutchison Telecommunications
Performance |
| Timeline |
| AiMedia Technologies |
| Hutchison Telecommunicatio |
AiMedia Technologies and Hutchison Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AiMedia Technologies and Hutchison Telecommunicatio
The main advantage of trading using opposite AiMedia Technologies and Hutchison Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AiMedia Technologies 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.| AiMedia Technologies vs. PVW Resources | AiMedia Technologies vs. Woolworths | AiMedia Technologies vs. Wesfarmers | AiMedia Technologies vs. Coles Group |
| Hutchison Telecommunicatio vs. PVW Resources | Hutchison Telecommunicatio vs. Woolworths | Hutchison Telecommunicatio vs. Wesfarmers | Hutchison Telecommunicatio vs. Coles Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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