Correlation Between HK Electric and UET United
Can any of the company-specific risk be diversified away by investing in both HK Electric and UET United 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 UET United 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 UET United Electronic, you can compare the effects of market volatilities on HK Electric and UET United 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 UET United. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and UET United.
Diversification Opportunities for HK Electric and UET United
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between HKT and UET is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and UET United Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UET United Electronic 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 UET United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UET United Electronic has no effect on the direction of HK Electric i.e., HK Electric and UET United go up and down completely randomly.
Pair Corralation between HK Electric and UET United
Assuming the 90 days trading horizon HK Electric Investments is expected to generate 0.47 times more return on investment than UET United. However, HK Electric Investments is 2.13 times less risky than UET United. It trades about 0.08 of its potential returns per unit of risk. UET United Electronic is currently generating about -0.07 per unit of risk. If you would invest 65.00 in HK Electric Investments on December 4, 2024 and sell it today you would earn a total of 1.00 from holding HK Electric Investments or generate 1.54% 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. UET United Electronic
Performance |
| Timeline |
| HK Electric Investments |
| UET United Electronic |
HK Electric and UET United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and UET United
The main advantage of trading using opposite HK Electric and UET United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, UET United 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 UET United will offset losses from the drop in UET United's long position.| HK Electric vs. COFCO Joycome Foods | HK Electric vs. Cal Maine Foods | HK Electric vs. 24SEVENOFFICE GROUP AB | HK Electric vs. CITY OFFICE REIT |
| UET United vs. National Retail Properties | UET United vs. JIAHUA STORES | UET United vs. Caseys General Stores | UET United vs. Fast Retailing Co |
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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