Correlation Between Hapag-Lloyd and HK Electric
Can any of the company-specific risk be diversified away by investing in both Hapag-Lloyd and HK Electric 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 Hapag-Lloyd and HK Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hapag Lloyd AG and HK Electric Investments, you can compare the effects of market volatilities on Hapag-Lloyd and HK Electric 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 Hapag-Lloyd with a short position of HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag-Lloyd and HK Electric.
Diversification Opportunities for Hapag-Lloyd and HK Electric
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hapag-Lloyd and HKT is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd AG and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric Investments and Hapag-Lloyd 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 Hapag Lloyd AG are associated (or correlated) with HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of Hapag-Lloyd i.e., Hapag-Lloyd and HK Electric go up and down completely randomly.
Pair Corralation between Hapag-Lloyd and HK Electric
Assuming the 90 days trading horizon Hapag Lloyd AG is expected to generate 1.54 times more return on investment than HK Electric. However, Hapag-Lloyd is 1.54 times more volatile than HK Electric Investments. It trades about 0.43 of its potential returns per unit of risk. HK Electric Investments is currently generating about 0.08 per unit of risk. If you would invest 13,150 in Hapag Lloyd AG on November 28, 2024 and sell it today you would earn a total of 1,810 from holding Hapag Lloyd AG or generate 13.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hapag Lloyd AG vs. HK Electric Investments
Performance |
| Timeline |
| Hapag Lloyd AG |
| HK Electric Investments |
Hapag-Lloyd and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hapag-Lloyd and HK Electric
The main advantage of trading using opposite Hapag-Lloyd and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag-Lloyd position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric's long position.| Hapag-Lloyd vs. GALENA MINING LTD | Hapag-Lloyd vs. Evolution Mining Limited | Hapag-Lloyd vs. MINCO SILVER | Hapag-Lloyd vs. Endeavour Mining PLC |
| HK Electric vs. Coeur Mining | HK Electric vs. Spirent Communications plc | HK Electric vs. COMBA TELECOM SYST | HK Electric vs. Singapore Telecommunications Limited |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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