Correlation Between Hong Kong and Deutsche Börse
Can any of the company-specific risk be diversified away by investing in both Hong Kong and Deutsche Börse 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 Hong Kong and Deutsche Börse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Exchanges and Deutsche Brse AG, you can compare the effects of market volatilities on Hong Kong and Deutsche Börse 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 Hong Kong with a short position of Deutsche Börse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Deutsche Börse.
Diversification Opportunities for Hong Kong and Deutsche Börse
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hong and Deutsche is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Exchanges and Deutsche Brse AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Brse AG and Hong Kong 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 Hong Kong Exchanges are associated (or correlated) with Deutsche Börse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Brse AG has no effect on the direction of Hong Kong i.e., Hong Kong and Deutsche Börse go up and down completely randomly.
Pair Corralation between Hong Kong and Deutsche Börse
Assuming the 90 days horizon Hong Kong Exchanges is expected to under-perform the Deutsche Börse. In addition to that, Hong Kong is 2.03 times more volatile than Deutsche Brse AG. It trades about -0.06 of its total potential returns per unit of risk. Deutsche Brse AG is currently generating about 0.0 per unit of volatility. If you would invest 23,200 in Deutsche Brse AG on August 31, 2024 and sell it today you would lose (136.00) from holding Deutsche Brse AG or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Kong Exchanges vs. Deutsche Brse AG
Performance |
| Timeline |
| Hong Kong Exchanges |
| Deutsche Brse AG |
Hong Kong and Deutsche Börse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Deutsche Börse
The main advantage of trading using opposite Hong Kong and Deutsche Börse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong position performs unexpectedly, Deutsche Börse 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 Deutsche Börse will offset losses from the drop in Deutsche Börse's long position.| Hong Kong vs. Singapore Exchange Limited | Hong Kong vs. London Stock Exchange | Hong Kong vs. MSCI Inc | Hong Kong vs. London Stock Exchange |
| Deutsche Börse vs. Singapore Exchange Limited | Deutsche Börse vs. London Stock Exchange | Deutsche Börse vs. London Stock Exchange | Deutsche Börse vs. Hong Kong Exchanges |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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