Correlation Between Hong Kong and Hammerson PLC
Can any of the company-specific risk be diversified away by investing in both Hong Kong and Hammerson PLC 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 Hammerson PLC 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 Hammerson PLC, you can compare the effects of market volatilities on Hong Kong and Hammerson PLC 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 Hammerson PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Hammerson PLC.
Diversification Opportunities for Hong Kong and Hammerson PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hong and Hammerson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land and Hammerson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammerson PLC 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 Hammerson PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammerson PLC has no effect on the direction of Hong Kong i.e., Hong Kong and Hammerson PLC go up and down completely randomly.
Pair Corralation between Hong Kong and Hammerson PLC
Assuming the 90 days trading horizon Hong Kong is expected to generate 3.49 times less return on investment than Hammerson PLC. But when comparing it to its historical volatility, Hong Kong Land is 26.1 times less risky than Hammerson PLC. It trades about 0.07 of its potential returns per unit of risk. Hammerson PLC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 28,780 in Hammerson PLC on November 28, 2024 and sell it today you would earn a total of 160.00 from holding Hammerson PLC or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Kong Land vs. Hammerson PLC
Performance |
| Timeline |
| Hong Kong Land |
| Hammerson PLC |
Hong Kong and Hammerson PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Hammerson PLC
The main advantage of trading using opposite Hong Kong and Hammerson PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong position performs unexpectedly, Hammerson PLC 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 Hammerson PLC will offset losses from the drop in Hammerson PLC's long position.| Hong Kong vs. Bigblu Broadband PLC | Hong Kong vs. Gaztransport et Technigaz | Hong Kong vs. Polar Capital Technology | Hong Kong vs. Allianz Technology Trust |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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