Correlation Between CDL INVESTMENT and HK Electric
Can any of the company-specific risk be diversified away by investing in both CDL INVESTMENT 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 CDL INVESTMENT and HK Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDL INVESTMENT and HK Electric Investments, you can compare the effects of market volatilities on CDL INVESTMENT 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 CDL INVESTMENT with a short position of HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDL INVESTMENT and HK Electric.
Diversification Opportunities for CDL INVESTMENT and HK Electric
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CDL and HKT is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT 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 CDL INVESTMENT 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 CDL INVESTMENT 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 CDL INVESTMENT i.e., CDL INVESTMENT and HK Electric go up and down completely randomly.
Pair Corralation between CDL INVESTMENT and HK Electric
Assuming the 90 days trading horizon CDL INVESTMENT is expected to under-perform the HK Electric. In addition to that, CDL INVESTMENT is 6.17 times more volatile than HK Electric Investments. It trades about -0.11 of its total potential returns per unit of risk. HK Electric Investments is currently generating about -0.24 per unit of volatility. If you would invest 65.00 in HK Electric Investments on October 25, 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDL INVESTMENT vs. HK Electric Investments
Performance |
| Timeline |
| CDL INVESTMENT |
| HK Electric Investments |
CDL INVESTMENT and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDL INVESTMENT and HK Electric
The main advantage of trading using opposite CDL INVESTMENT and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDL INVESTMENT 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.| CDL INVESTMENT vs. MPH Health Care | CDL INVESTMENT vs. CLOVER HEALTH INV | CDL INVESTMENT vs. SHIP HEALTHCARE HLDGINC | CDL INVESTMENT vs. CVS Health |
| HK Electric vs. Virtu Financial | HK Electric vs. Ameriprise Financial | HK Electric vs. BOSTON BEER A | HK Electric vs. REVO INSURANCE SPA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |