Correlation Between Global Data and Hutchison Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Global Data 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 Global Data and Hutchison Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Data Centre and Hutchison Telecommunications, you can compare the effects of market volatilities on Global Data 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 Global Data with a short position of Hutchison Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Data and Hutchison Telecommunicatio.
Diversification Opportunities for Global Data and Hutchison Telecommunicatio
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Hutchison is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Global Data Centre and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio and Global Data 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 Global Data Centre 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 Global Data i.e., Global Data and Hutchison Telecommunicatio go up and down completely randomly.
Pair Corralation between Global Data and Hutchison Telecommunicatio
Assuming the 90 days trading horizon Global Data Centre is expected to generate 0.09 times more return on investment than Hutchison Telecommunicatio. However, Global Data Centre is 11.43 times less risky than Hutchison Telecommunicatio. It trades about 0.31 of its potential returns per unit of risk. Hutchison Telecommunications is currently generating about 0.01 per unit of risk. If you would invest 141.00 in Global Data Centre on September 19, 2024 and sell it today you would earn a total of 2.00 from holding Global Data Centre or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Data Centre vs. Hutchison Telecommunications
Performance |
| Timeline |
| Global Data Centre |
| Hutchison Telecommunicatio |
Global Data and Hutchison Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Data and Hutchison Telecommunicatio
The main advantage of trading using opposite Global Data and Hutchison Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Data 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.| Global Data vs. Hudson Investment Group | Global Data vs. Skycity Entertainment Group | Global Data vs. Infomedia | Global Data vs. AiMedia Technologies |
| Hutchison Telecommunicatio vs. Aneka Tambang Tbk | Hutchison Telecommunicatio vs. BHP Group Limited | Hutchison Telecommunicatio vs. Commonwealth Bank | Hutchison Telecommunicatio vs. Commonwealth Bank of |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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