Correlation Between HKT Trust and Dow Jones
Can any of the company-specific risk be diversified away by investing in both HKT Trust and Dow Jones 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 HKT Trust and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HKT Trust ADR and Dow Jones Industrial, you can compare the effects of market volatilities on HKT Trust and Dow Jones 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 HKT Trust with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of HKT Trust and Dow Jones.
Diversification Opportunities for HKT Trust and Dow Jones
Very good diversification
The 3 months correlation between HKT and Dow is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding HKT Trust ADR and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and HKT Trust 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 HKT Trust ADR are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of HKT Trust i.e., HKT Trust and Dow Jones go up and down completely randomly.
Pair Corralation between HKT Trust and Dow Jones
Assuming the 90 days horizon HKT Trust ADR is expected to under-perform the Dow Jones. In addition to that, HKT Trust is 5.63 times more volatile than Dow Jones Industrial. It trades about 0.0 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
HKT Trust ADR vs. Dow Jones Industrial
Performance |
| Timeline |
HKT Trust and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
HKT Trust ADR
Pair trading matchups for HKT Trust
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with HKT Trust and Dow Jones
The main advantage of trading using opposite HKT Trust and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HKT Trust position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| HKT Trust vs. Vodafone Group PLC | HKT Trust vs. KDDI Corp | HKT Trust vs. Amrica Mvil, SAB | HKT Trust vs. ATT Inc |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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