Correlation Between Hong Kong and Cars
Can any of the company-specific risk be diversified away by investing in both Hong Kong and Cars 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 Hong Kong and Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Land and Cars Inc, you can compare the effects of market volatilities on Hong Kong and Cars 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 Hong Kong with a short position of Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Cars.
Diversification Opportunities for Hong Kong and Cars
Pay attention - limited upside
The 3 months correlation between Hong and Cars is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc and Hong Kong 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 Hong Kong Land are associated (or correlated) with Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Hong Kong i.e., Hong Kong and Cars go up and down completely randomly.
Pair Corralation between Hong Kong and Cars
Assuming the 90 days trading horizon Hong Kong is expected to generate 14.9 times less return on investment than Cars. But when comparing it to its historical volatility, Hong Kong Land is 23.97 times less risky than Cars. It trades about 0.08 of its potential returns per unit of risk. Cars Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,372 in Cars Inc on September 13, 2024 and sell it today you would earn a total of 510.00 from holding Cars Inc or generate 37.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 53.43% |
| Values | Daily Returns |
Hong Kong Land vs. Cars Inc
Performance |
| Timeline |
| Hong Kong Land |
| Cars Inc |
Hong Kong and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Cars
The main advantage of trading using opposite Hong Kong and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.| Hong Kong vs. Jacquet Metal Service | Hong Kong vs. Wyndham Hotels Resorts | Hong Kong vs. InterContinental Hotels Group | Hong Kong vs. AMG Advanced Metallurgical |
| Cars vs. Host Hotels Resorts | Cars vs. Ecofin Global Utilities | Cars vs. PPHE Hotel Group | Cars vs. Park Hotels Resorts |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Stocks Directory Find actively traded stocks across global markets | |
| CEOs Directory Screen CEOs from public companies around the world |