Correlation Between HK Electric and Chegg
Can any of the company-specific risk be diversified away by investing in both HK Electric and Chegg 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 HK Electric and Chegg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HK Electric Investments and Chegg Inc, you can compare the effects of market volatilities on HK Electric and Chegg 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 HK Electric with a short position of Chegg. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and Chegg.
Diversification Opportunities for HK Electric and Chegg
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HKT and Chegg is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and Chegg Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chegg Inc and HK Electric 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 HK Electric Investments are associated (or correlated) with Chegg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chegg Inc has no effect on the direction of HK Electric i.e., HK Electric and Chegg go up and down completely randomly.
Pair Corralation between HK Electric and Chegg
Assuming the 90 days trading horizon HK Electric is expected to generate 215.29 times less return on investment than Chegg. But when comparing it to its historical volatility, HK Electric Investments is 7.46 times less risky than Chegg. It trades about 0.0 of its potential returns per unit of risk. Chegg Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 163.00 in Chegg Inc on September 20, 2024 and sell it today you would earn a total of 28.00 from holding Chegg Inc or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HK Electric Investments vs. Chegg Inc
Performance |
| Timeline |
| HK Electric Investments |
| Chegg Inc |
HK Electric and Chegg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and Chegg
The main advantage of trading using opposite HK Electric and Chegg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, Chegg 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 Chegg will offset losses from the drop in Chegg's long position.| HK Electric vs. MCEWEN MINING INC | HK Electric vs. KENNAMETAL INC | HK Electric vs. GRIFFIN MINING LTD | HK Electric vs. Zijin Mining Group |
| Chegg vs. HK Electric Investments | Chegg vs. BRAGG GAMING GRP | Chegg vs. CDL INVESTMENT | Chegg vs. Virtus Investment Partners |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |