Correlation Between HK Electric and WisdomTree Investments
Can any of the company-specific risk be diversified away by investing in both HK Electric and WisdomTree Investments 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 WisdomTree Investments 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 WisdomTree Investments, you can compare the effects of market volatilities on HK Electric and WisdomTree Investments 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 WisdomTree Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and WisdomTree Investments.
Diversification Opportunities for HK Electric and WisdomTree Investments
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HKT and WisdomTree is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and WisdomTree Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Investments 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 WisdomTree Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Investments has no effect on the direction of HK Electric i.e., HK Electric and WisdomTree Investments go up and down completely randomly.
Pair Corralation between HK Electric and WisdomTree Investments
Assuming the 90 days trading horizon HK Electric Investments is expected to generate 0.69 times more return on investment than WisdomTree Investments. However, HK Electric Investments is 1.45 times less risky than WisdomTree Investments. It trades about 0.08 of its potential returns per unit of risk. WisdomTree Investments is currently generating about -0.18 per unit of risk. If you would invest 64.00 in HK Electric Investments on November 28, 2024 and sell it today you would earn a total of 1.00 from holding HK Electric Investments or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
HK Electric Investments vs. WisdomTree Investments
Performance |
| Timeline |
| HK Electric Investments |
| WisdomTree Investments |
HK Electric and WisdomTree Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and WisdomTree Investments
The main advantage of trading using opposite HK Electric and WisdomTree Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, WisdomTree Investments 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 WisdomTree Investments will offset losses from the drop in WisdomTree Investments' long position.| HK Electric vs. Coeur Mining | HK Electric vs. Spirent Communications plc | HK Electric vs. COMBA TELECOM SYST | HK Electric vs. Singapore Telecommunications Limited |
| WisdomTree Investments vs. Blackstone Group | WisdomTree Investments vs. The Bank of | WisdomTree Investments vs. Ameriprise Financial | WisdomTree Investments vs. State Street |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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