Correlation Between HK Electric and REDSUN PROPERTIES
Can any of the company-specific risk be diversified away by investing in both HK Electric and REDSUN PROPERTIES 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 REDSUN PROPERTIES 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 REDSUN PROPERTIES GROUP, you can compare the effects of market volatilities on HK Electric and REDSUN PROPERTIES 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 REDSUN PROPERTIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and REDSUN PROPERTIES.
Diversification Opportunities for HK Electric and REDSUN PROPERTIES
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HKT and REDSUN is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and REDSUN PROPERTIES GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REDSUN PROPERTIES 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 REDSUN PROPERTIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REDSUN PROPERTIES has no effect on the direction of HK Electric i.e., HK Electric and REDSUN PROPERTIES go up and down completely randomly.
Pair Corralation between HK Electric and REDSUN PROPERTIES
Assuming the 90 days trading horizon HK Electric is expected to generate 1050.43 times less return on investment than REDSUN PROPERTIES. But when comparing it to its historical volatility, HK Electric Investments is 31.79 times less risky than REDSUN PROPERTIES. It trades about 0.0 of its potential returns per unit of risk. REDSUN PROPERTIES GROUP is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.25 in REDSUN PROPERTIES GROUP on October 21, 2024 and sell it today you would earn a total of 0.00 from holding REDSUN PROPERTIES GROUP or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HK Electric Investments vs. REDSUN PROPERTIES GROUP
Performance |
| Timeline |
| HK Electric Investments |
| REDSUN PROPERTIES |
HK Electric and REDSUN PROPERTIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and REDSUN PROPERTIES
The main advantage of trading using opposite HK Electric and REDSUN PROPERTIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, REDSUN PROPERTIES 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 REDSUN PROPERTIES will offset losses from the drop in REDSUN PROPERTIES's long position.| HK Electric vs. PRECISION DRILLING P | HK Electric vs. Laureate Education | HK Electric vs. SCANSOURCE | HK Electric vs. IDP EDUCATION LTD |
| REDSUN PROPERTIES vs. China Resources Land | REDSUN PROPERTIES vs. CTP NV EO | REDSUN PROPERTIES vs. SEAZEN GROUP LTD | REDSUN PROPERTIES vs. Atrium Ljungberg AB |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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