Correlation Between HK Electric and G III
Can any of the company-specific risk be diversified away by investing in both HK Electric and G III 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 G III 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 G III Apparel Group, you can compare the effects of market volatilities on HK Electric and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and G III.
Diversification Opportunities for HK Electric and G III
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HKT and GI4 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of HK Electric i.e., HK Electric and G III go up and down completely randomly.
Pair Corralation between HK Electric and G III
Assuming the 90 days trading horizon HK Electric Investments is expected to generate 0.22 times more return on investment than G III. However, HK Electric Investments is 4.48 times less risky than G III. It trades about -0.24 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.19 per unit of risk. If you would invest 65.00 in HK Electric Investments on October 25, 2024 and sell it today you would lose (1.00) from holding HK Electric Investments or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
HK Electric Investments vs. G III Apparel Group
Performance |
| Timeline |
| HK Electric Investments |
| G III Apparel |
HK Electric and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and G III
The main advantage of trading using opposite HK Electric and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, G III 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 G III will offset losses from the drop in G III'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 |
| G III vs. PennantPark Investment | G III vs. HK Electric Investments | G III vs. Micron Technology | G III vs. FANDIFI TECHNOLOGY P |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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