Correlation Between HK Electric and ALTER NRG
Can any of the company-specific risk be diversified away by investing in both HK Electric and ALTER NRG 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 ALTER NRG 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 ALTER NRG, you can compare the effects of market volatilities on HK Electric and ALTER NRG 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 ALTER NRG. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and ALTER NRG.
Diversification Opportunities for HK Electric and ALTER NRG
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HKT and ALTER is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and ALTER NRG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTER NRG 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 ALTER NRG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALTER NRG has no effect on the direction of HK Electric i.e., HK Electric and ALTER NRG go up and down completely randomly.
Pair Corralation between HK Electric and ALTER NRG
Assuming the 90 days trading horizon HK Electric Investments is expected to generate 1.21 times more return on investment than ALTER NRG. However, HK Electric is 1.21 times more volatile than ALTER NRG. It trades about 0.09 of its potential returns per unit of risk. ALTER NRG is currently generating about 0.0 per unit of risk. If you would invest 17.00 in HK Electric Investments on September 14, 2024 and sell it today you would earn a total of 46.00 from holding HK Electric Investments or generate 270.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HK Electric Investments vs. ALTER NRG
Performance |
| Timeline |
| HK Electric Investments |
| ALTER NRG |
HK Electric and ALTER NRG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and ALTER NRG
The main advantage of trading using opposite HK Electric and ALTER NRG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, ALTER NRG 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 ALTER NRG will offset losses from the drop in ALTER NRG's long position.| HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc |
| ALTER NRG vs. ANTA SPORTS PRODUCT | ALTER NRG vs. Playa Hotels Resorts | ALTER NRG vs. HK Electric Investments | ALTER NRG vs. SLR Investment Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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