Correlation Between Hanison Construction and Hong Kong
Can any of the company-specific risk be diversified away by investing in both Hanison Construction and Hong Kong 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 Hanison Construction and Hong Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanison Construction Holdings and Hong Kong Exchanges, you can compare the effects of market volatilities on Hanison Construction and Hong Kong 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 Hanison Construction with a short position of Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanison Construction and Hong Kong.
Diversification Opportunities for Hanison Construction and Hong Kong
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanison and Hong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hanison Construction Holdings and Hong Kong Exchanges in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Exchanges and Hanison Construction 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 Hanison Construction Holdings are associated (or correlated) with Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Exchanges has no effect on the direction of Hanison Construction i.e., Hanison Construction and Hong Kong go up and down completely randomly.
Pair Corralation between Hanison Construction and Hong Kong
Assuming the 90 days trading horizon Hanison Construction Holdings is expected to generate 0.85 times more return on investment than Hong Kong. However, Hanison Construction Holdings is 1.18 times less risky than Hong Kong. It trades about 0.05 of its potential returns per unit of risk. Hong Kong Exchanges is currently generating about 0.04 per unit of risk. If you would invest 8.53 in Hanison Construction Holdings on October 25, 2024 and sell it today you would earn a total of 5.47 from holding Hanison Construction Holdings or generate 64.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hanison Construction Holdings vs. Hong Kong Exchanges
Performance |
| Timeline |
| Hanison Construction |
| Hong Kong Exchanges |
Hanison Construction and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanison Construction and Hong Kong
The main advantage of trading using opposite Hanison Construction and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanison Construction position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| Hanison Construction vs. Johnson Controls International | Hanison Construction vs. China Railway Construction |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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