Correlation Between Hong Kong and Snam SpA
Can any of the company-specific risk be diversified away by investing in both Hong Kong and Snam SpA 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 Snam SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong and and Snam SpA, you can compare the effects of market volatilities on Hong Kong and Snam SpA 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 Snam SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Snam SpA.
Diversification Opportunities for Hong Kong and Snam SpA
Weak diversification
The 3 months correlation between Hong and Snam is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong and and Snam SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snam SpA 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 and are associated (or correlated) with Snam SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snam SpA has no effect on the direction of Hong Kong i.e., Hong Kong and Snam SpA go up and down completely randomly.
Pair Corralation between Hong Kong and Snam SpA
Assuming the 90 days horizon Hong Kong and is expected to under-perform the Snam SpA. In addition to that, Hong Kong is 1.59 times more volatile than Snam SpA. It trades about -0.05 of its total potential returns per unit of risk. Snam SpA is currently generating about 0.01 per unit of volatility. If you would invest 479.00 in Snam SpA on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Snam SpA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Kong and vs. Snam SpA
Performance |
| Timeline |
| Hong Kong |
| Snam SpA |
Hong Kong and Snam SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Snam SpA
The main advantage of trading using opposite Hong Kong and Snam SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong position performs unexpectedly, Snam SpA 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 Snam SpA will offset losses from the drop in Snam SpA's long position.| Hong Kong vs. Henderson Land Development | Hong Kong vs. CLP Holdings | Hong Kong vs. Power Assets Holdings | Hong Kong vs. Hang Lung Properties |
| Snam SpA vs. Marine Products | Snam SpA vs. Aegon NV ADR | Snam SpA vs. Wabash National | Snam SpA vs. Cars Inc |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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