Correlation Between HK Electric and Atos SE
Can any of the company-specific risk be diversified away by investing in both HK Electric and Atos SE 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 Atos SE 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 Atos SE, you can compare the effects of market volatilities on HK Electric and Atos SE 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 Atos SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and Atos SE.
Diversification Opportunities for HK Electric and Atos SE
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HKT and Atos is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and Atos SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atos SE 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 Atos SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atos SE has no effect on the direction of HK Electric i.e., HK Electric and Atos SE go up and down completely randomly.
Pair Corralation between HK Electric and Atos SE
Assuming the 90 days trading horizon HK Electric is expected to generate 28.86 times less return on investment than Atos SE. But when comparing it to its historical volatility, HK Electric Investments is 21.62 times less risky than Atos SE. It trades about 0.09 of its potential returns per unit of risk. Atos SE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.18 in Atos SE on October 12, 2024 and sell it today you would earn a total of 0.03 from holding Atos SE or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HK Electric Investments vs. Atos SE
Performance |
| Timeline |
| HK Electric Investments |
| Atos SE |
HK Electric and Atos SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and Atos SE
The main advantage of trading using opposite HK Electric and Atos SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, Atos SE 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 Atos SE will offset losses from the drop in Atos SE's long position.| HK Electric vs. GMO Internet | HK Electric vs. Retail Estates NV | HK Electric vs. BURLINGTON STORES | HK Electric vs. Ribbon Communications |
| Atos SE vs. HK Electric Investments | Atos SE vs. INTERSHOP Communications Aktiengesellschaft | Atos SE vs. Japan Asia Investment | Atos SE vs. PennantPark Investment |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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