Correlation Between HK Electric and CARSALESCOM
Can any of the company-specific risk be diversified away by investing in both HK Electric and CARSALESCOM 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 CARSALESCOM 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 CARSALESCOM, you can compare the effects of market volatilities on HK Electric and CARSALESCOM 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 CARSALESCOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and CARSALESCOM.
Diversification Opportunities for HK Electric and CARSALESCOM
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HKT and CARSALESCOM is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and CARSALESCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARSALESCOM 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 CARSALESCOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARSALESCOM has no effect on the direction of HK Electric i.e., HK Electric and CARSALESCOM go up and down completely randomly.
Pair Corralation between HK Electric and CARSALESCOM
Assuming the 90 days trading horizon HK Electric Investments is expected to under-perform the CARSALESCOM. But the stock apears to be less risky and, when comparing its historical volatility, HK Electric Investments is 4.88 times less risky than CARSALESCOM. The stock trades about -0.24 of its potential returns per unit of risk. The CARSALESCOM is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,180 in CARSALESCOM on October 25, 2024 and sell it today you would earn a total of 180.00 from holding CARSALESCOM or generate 8.26% 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. CARSALESCOM
Performance |
| Timeline |
| HK Electric Investments |
| CARSALESCOM |
HK Electric and CARSALESCOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and CARSALESCOM
The main advantage of trading using opposite HK Electric and CARSALESCOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, CARSALESCOM 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 CARSALESCOM will offset losses from the drop in CARSALESCOM'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 |
| CARSALESCOM vs. SHIP HEALTHCARE HLDGINC | CARSALESCOM vs. CVS Health | CARSALESCOM vs. Citic Telecom International | CARSALESCOM vs. COMBA TELECOM SYST |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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