Correlation Between Hansa Investment and Fidelity China
Can any of the company-specific risk be diversified away by investing in both Hansa Investment and Fidelity China 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 Hansa Investment and Fidelity China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansa Investment and Fidelity China Special, you can compare the effects of market volatilities on Hansa Investment and Fidelity China 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 Hansa Investment with a short position of Fidelity China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Investment and Fidelity China.
Diversification Opportunities for Hansa Investment and Fidelity China
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hansa and Fidelity is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Investment and Fidelity China Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity China Special and Hansa 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 Hansa Investment are associated (or correlated) with Fidelity China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity China Special has no effect on the direction of Hansa Investment i.e., Hansa Investment and Fidelity China go up and down completely randomly.
Pair Corralation between Hansa Investment and Fidelity China
Assuming the 90 days trading horizon Hansa Investment is expected to generate 0.74 times more return on investment than Fidelity China. However, Hansa Investment is 1.35 times less risky than Fidelity China. It trades about -0.02 of its potential returns per unit of risk. Fidelity China Special is currently generating about -0.02 per unit of risk. If you would invest 22,700 in Hansa Investment on September 5, 2024 and sell it today you would lose (200.00) from holding Hansa Investment or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansa Investment vs. Fidelity China Special
Performance |
| Timeline |
| Hansa Investment |
| Fidelity China Special |
Hansa Investment and Fidelity China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansa Investment and Fidelity China
The main advantage of trading using opposite Hansa Investment and Fidelity China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Investment position performs unexpectedly, Fidelity China 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 Fidelity China will offset losses from the drop in Fidelity China's long position.| Hansa Investment vs. CATCo Reinsurance Opportunities | Hansa Investment vs. Fair Oaks Income | Hansa Investment vs. Legal General Group | Hansa Investment vs. Intermediate Capital Group |
| Fidelity China vs. SupplyMe Capital PLC | Fidelity China vs. Lloyds Banking Group | Fidelity China vs. Premier African Minerals | Fidelity China vs. SANTANDER UK 8 |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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