Correlation Between Hong Kong and Universal Health
Can any of the company-specific risk be diversified away by investing in both Hong Kong and Universal Health 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 Universal Health 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 Universal Health Services, you can compare the effects of market volatilities on Hong Kong and Universal Health 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 Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Universal Health.
Diversification Opportunities for Hong Kong and Universal Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hong and Universal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land and Universal Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Services 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 Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Services has no effect on the direction of Hong Kong i.e., Hong Kong and Universal Health go up and down completely randomly.
Pair Corralation between Hong Kong and Universal Health
Assuming the 90 days trading horizon Hong Kong is expected to generate 8.9 times less return on investment than Universal Health. But when comparing it to its historical volatility, Hong Kong Land is 14.09 times less risky than Universal Health. It trades about 0.08 of its potential returns per unit of risk. Universal Health Services is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 15,049 in Universal Health Services on September 12, 2024 and sell it today you would earn a total of 4,238 from holding Universal Health Services or generate 28.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 88.17% |
| Values | Daily Returns |
Hong Kong Land vs. Universal Health Services
Performance |
| Timeline |
| Hong Kong Land |
| Universal Health Services |
Hong Kong and Universal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Universal Health
The main advantage of trading using opposite Hong Kong and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong position performs unexpectedly, Universal Health 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 Universal Health will offset losses from the drop in Universal Health's long position.| Hong Kong vs. Wheaton Precious Metals | Hong Kong vs. Universal Display Corp | Hong Kong vs. Zoom Video Communications | Hong Kong vs. Cornish Metals |
| Universal Health vs. Hong Kong Land | Universal Health vs. Neometals | Universal Health vs. Coor Service Management | Universal Health vs. Fidelity Sustainable USD |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |