Correlation Between Hong Kong and Fortune Brands
Can any of the company-specific risk be diversified away by investing in both Hong Kong and Fortune Brands 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 Fortune Brands 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 Fortune Brands Home, you can compare the effects of market volatilities on Hong Kong and Fortune Brands 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 Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Fortune Brands.
Diversification Opportunities for Hong Kong and Fortune Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hong and Fortune is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home 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 Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of Hong Kong i.e., Hong Kong and Fortune Brands go up and down completely randomly.
Pair Corralation between Hong Kong and Fortune Brands
If you would invest 7,653 in Fortune Brands Home on September 13, 2024 and sell it today you would earn a total of 125.00 from holding Fortune Brands Home or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Hong Kong Land vs. Fortune Brands Home
Performance |
| Timeline |
| Hong Kong Land |
| Fortune Brands Home |
Hong Kong and Fortune Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Fortune Brands
The main advantage of trading using opposite Hong Kong and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' 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 |
| Fortune Brands vs. METALL ZUG AG | Fortune Brands vs. Endeavour Mining Corp | Fortune Brands vs. Raytheon Technologies Corp | Fortune Brands vs. Hochschild Mining 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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