Correlation Between HK Electric and AT S
Can any of the company-specific risk be diversified away by investing in both HK Electric and AT S 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 AT S 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 AT S Austria, you can compare the effects of market volatilities on HK Electric and AT S 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 AT S. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and AT S.
Diversification Opportunities for HK Electric and AT S
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HKT and AUS is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria 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 AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of HK Electric i.e., HK Electric and AT S go up and down completely randomly.
Pair Corralation between HK Electric and AT S
Assuming the 90 days trading horizon HK Electric Investments is expected to generate 1.15 times more return on investment than AT S. However, HK Electric is 1.15 times more volatile than AT S Austria. It trades about 0.09 of its potential returns per unit of risk. AT S Austria is currently generating about -0.05 per unit of risk. If you would invest 17.00 in HK Electric Investments on September 4, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HK Electric Investments vs. AT S Austria
Performance |
| Timeline |
| HK Electric Investments |
| AT S Austria |
HK Electric and AT S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and AT S
The main advantage of trading using opposite HK Electric and AT S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, AT S 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 AT S will offset losses from the drop in AT S's long position.| HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc |
| AT S vs. Uber Technologies | AT S vs. HK Electric Investments | AT S vs. Axcelis Technologies | AT S vs. Chuangs China Investments |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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