Correlation Between Brockhaus Capital and Hong Kong

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Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital 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 Brockhaus Capital and Hong Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and Hong Kong Exchanges, you can compare the effects of market volatilities on Brockhaus Capital 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 Brockhaus Capital with a short position of Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and Hong Kong.

Diversification Opportunities for Brockhaus Capital and Hong Kong

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between Brockhaus and Hong is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management 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 Brockhaus Capital 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 Brockhaus Capital Management 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 Brockhaus Capital i.e., Brockhaus Capital and Hong Kong go up and down completely randomly.

Pair Corralation between Brockhaus Capital and Hong Kong

Assuming the 90 days trading horizon Brockhaus Capital Management is expected to under-perform the Hong Kong. But the stock apears to be less risky and, when comparing its historical volatility, Brockhaus Capital Management is 1.28 times less risky than Hong Kong. The stock trades about -0.09 of its potential returns per unit of risk. The Hong Kong Exchanges is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,726  in Hong Kong Exchanges on September 13, 2024 and sell it today you would earn a total of  24.00  from holding Hong Kong Exchanges or generate 0.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Brockhaus Capital Management  vs.  Hong Kong Exchanges

 Performance 
       Timeline  
Brockhaus Capital 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Brockhaus Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Hong Kong Exchanges 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Hong Kong Exchanges are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Hong Kong reported solid returns over the last few months and may actually be approaching a breakup point.

Brockhaus Capital and Hong Kong Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brockhaus Capital and Hong Kong

The main advantage of trading using opposite Brockhaus Capital and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital 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.
The idea behind Brockhaus Capital Management and Hong Kong Exchanges 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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