Correlation Between HK Electric and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both HK Electric and Gaztransport Technigaz 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 Gaztransport Technigaz 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 Gaztransport Technigaz SA, you can compare the effects of market volatilities on HK Electric and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and Gaztransport Technigaz.
Diversification Opportunities for HK Electric and Gaztransport Technigaz
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HKT and Gaztransport is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of HK Electric i.e., HK Electric and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between HK Electric and Gaztransport Technigaz
Assuming the 90 days trading horizon HK Electric Investments is expected to generate 1.64 times more return on investment than Gaztransport Technigaz. However, HK Electric is 1.64 times more volatile than Gaztransport Technigaz SA. It trades about 0.11 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.05 per unit of risk. If you would invest 30.00 in HK Electric Investments on November 8, 2024 and sell it today you would earn a total of 34.00 from holding HK Electric Investments or generate 113.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HK Electric Investments vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| HK Electric Investments |
| Gaztransport Technigaz |
HK Electric and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and Gaztransport Technigaz
The main advantage of trading using opposite HK Electric and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| HK Electric vs. US FOODS HOLDING | HK Electric vs. NH Foods | HK Electric vs. SENECA FOODS A | HK Electric vs. USU Software AG |
| Gaztransport Technigaz vs. GAMES OPERATORS SA | Gaztransport Technigaz vs. GameStop Corp | Gaztransport Technigaz vs. UPDATE SOFTWARE | Gaztransport Technigaz vs. Firan Technology Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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