Correlation Between HK Electric and EnBW Energie
Can any of the company-specific risk be diversified away by investing in both HK Electric and EnBW Energie 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 EnBW Energie 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 EnBW Energie Baden Wrttemberg, you can compare the effects of market volatilities on HK Electric and EnBW Energie 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 EnBW Energie. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and EnBW Energie.
Diversification Opportunities for HK Electric and EnBW Energie
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HKT and EnBW is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and EnBW Energie Baden Wrttemberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnBW Energie Baden 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 EnBW Energie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnBW Energie Baden has no effect on the direction of HK Electric i.e., HK Electric and EnBW Energie go up and down completely randomly.
Pair Corralation between HK Electric and EnBW Energie
Assuming the 90 days trading horizon HK Electric Investments is expected to under-perform the EnBW Energie. But the stock apears to be less risky and, when comparing its historical volatility, HK Electric Investments is 4.68 times less risky than EnBW Energie. The stock trades about -0.24 of its potential returns per unit of risk. The EnBW Energie Baden Wrttemberg is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,000 in EnBW Energie Baden Wrttemberg on October 25, 2024 and sell it today you would earn a total of 260.00 from holding EnBW Energie Baden Wrttemberg or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
HK Electric Investments vs. EnBW Energie Baden Wrttemberg
Performance |
| Timeline |
| HK Electric Investments |
| EnBW Energie Baden |
HK Electric and EnBW Energie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and EnBW Energie
The main advantage of trading using opposite HK Electric and EnBW Energie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, EnBW Energie 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 EnBW Energie will offset losses from the drop in EnBW Energie's long position.| HK Electric vs. Virtu Financial | HK Electric vs. Ameriprise Financial | HK Electric vs. BOSTON BEER A | HK Electric vs. REVO INSURANCE SPA |
| EnBW Energie vs. Waste Management | EnBW Energie vs. CeoTronics AG | EnBW Energie vs. Casio Computer CoLtd | EnBW Energie vs. AGF Management Limited |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |