Correlation Between HK Electric and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both HK Electric and GREENX METALS 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 GREENX METALS 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 GREENX METALS LTD, you can compare the effects of market volatilities on HK Electric and GREENX METALS 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 GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and GREENX METALS.
Diversification Opportunities for HK Electric and GREENX METALS
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between HKT and GREENX is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD 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 GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of HK Electric i.e., HK Electric and GREENX METALS go up and down completely randomly.
Pair Corralation between HK Electric and GREENX METALS
Assuming the 90 days trading horizon HK Electric Investments is expected to generate 0.14 times more return on investment than GREENX METALS. However, HK Electric Investments is 7.01 times less risky than GREENX METALS. It trades about 0.0 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about -0.06 per unit of risk. If you would invest 63.00 in HK Electric Investments on September 12, 2024 and sell it today you would earn a total of 0.00 from holding HK Electric Investments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HK Electric Investments vs. GREENX METALS LTD
Performance |
| Timeline |
| HK Electric Investments |
| GREENX METALS LTD |
HK Electric and GREENX METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and GREENX METALS
The main advantage of trading using opposite HK Electric and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS's long position.| HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc |
| GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. SIVERS SEMICONDUCTORS AB | GREENX METALS vs. Norsk Hydro ASA | GREENX METALS vs. Reliance Steel Aluminum |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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