Correlation Between HUTCHMED China and Dolly Varden
Can any of the company-specific risk be diversified away by investing in both HUTCHMED China and Dolly Varden 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 HUTCHMED China and Dolly Varden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUTCHMED China and Dolly Varden Silver, you can compare the effects of market volatilities on HUTCHMED China and Dolly Varden 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 HUTCHMED China with a short position of Dolly Varden. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUTCHMED China and Dolly Varden.
Diversification Opportunities for HUTCHMED China and Dolly Varden
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between HUTCHMED and Dolly is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHMED China and Dolly Varden Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolly Varden Silver and HUTCHMED China 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 HUTCHMED China are associated (or correlated) with Dolly Varden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolly Varden Silver has no effect on the direction of HUTCHMED China i.e., HUTCHMED China and Dolly Varden go up and down completely randomly.
Pair Corralation between HUTCHMED China and Dolly Varden
Assuming the 90 days trading horizon HUTCHMED China is expected to generate 120.43 times less return on investment than Dolly Varden. But when comparing it to its historical volatility, HUTCHMED China is 1.67 times less risky than Dolly Varden. It trades about 0.0 of its potential returns per unit of risk. Dolly Varden Silver is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 83.00 in Dolly Varden Silver on September 1, 2024 and sell it today you would earn a total of 26.00 from holding Dolly Varden Silver or generate 31.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 34.8% |
| Values | Daily Returns |
HUTCHMED China vs. Dolly Varden Silver
Performance |
| Timeline |
| HUTCHMED China |
| Dolly Varden Silver |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
HUTCHMED China and Dolly Varden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUTCHMED China and Dolly Varden
The main advantage of trading using opposite HUTCHMED China and Dolly Varden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUTCHMED China position performs unexpectedly, Dolly Varden 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 Dolly Varden will offset losses from the drop in Dolly Varden's long position.| HUTCHMED China vs. Endeavour Mining Corp | HUTCHMED China vs. Wizz Air Holdings | HUTCHMED China vs. Greenroc Mining PLC | HUTCHMED China vs. AfriTin Mining |
| Dolly Varden vs. PPHE Hotel Group | Dolly Varden vs. Infrastrutture Wireless Italiane | Dolly Varden vs. Trainline Plc | Dolly Varden vs. Gear4music Plc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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