Correlation Between HK Electric and GRENKELEASING Dusseldorf
Can any of the company-specific risk be diversified away by investing in both HK Electric and GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf, you can compare the effects of market volatilities on HK Electric and GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and GRENKELEASING Dusseldorf.
Diversification Opportunities for HK Electric and GRENKELEASING Dusseldorf
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HKT and GRENKELEASING is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and GRENKELEASING Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRENKELEASING Dusseldorf has no effect on the direction of HK Electric i.e., HK Electric and GRENKELEASING Dusseldorf go up and down completely randomly.
Pair Corralation between HK Electric and GRENKELEASING Dusseldorf
Assuming the 90 days trading horizon HK Electric Investments is expected to generate 1.36 times more return on investment than GRENKELEASING Dusseldorf. However, HK Electric is 1.36 times more volatile than GRENKELEASING Dusseldorf. It trades about 0.09 of its potential returns per unit of risk. GRENKELEASING Dusseldorf is currently generating about -0.03 per unit of risk. If you would invest 18.00 in HK Electric Investments on October 28, 2024 and sell it today you would earn a total of 46.00 from holding HK Electric Investments or generate 255.56% 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. GRENKELEASING Dusseldorf
Performance |
| Timeline |
| HK Electric Investments |
| GRENKELEASING Dusseldorf |
HK Electric and GRENKELEASING Dusseldorf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and GRENKELEASING Dusseldorf
The main advantage of trading using opposite HK Electric and GRENKELEASING Dusseldorf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf will offset losses from the drop in GRENKELEASING Dusseldorf's long position.| HK Electric vs. Vishay Intertechnology | HK Electric vs. STRAYER EDUCATION | HK Electric vs. Xinhua Winshare Publishing | HK Electric vs. UPDATE SOFTWARE |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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