Correlation Between Hongkong and KEISEI EL
Can any of the company-specific risk be diversified away by investing in both Hongkong and KEISEI EL 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 Hongkong and KEISEI EL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hongkong and and KEISEI EL RAILWAY, you can compare the effects of market volatilities on Hongkong and KEISEI EL 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 Hongkong with a short position of KEISEI EL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongkong and KEISEI EL.
Diversification Opportunities for Hongkong and KEISEI EL
Very weak diversification
The 3 months correlation between Hongkong and KEISEI is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding The Hongkong and and KEISEI EL RAILWAY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEISEI EL RAILWAY and Hongkong 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 The Hongkong and are associated (or correlated) with KEISEI EL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEISEI EL RAILWAY has no effect on the direction of Hongkong i.e., Hongkong and KEISEI EL go up and down completely randomly.
Pair Corralation between Hongkong and KEISEI EL
Assuming the 90 days horizon The Hongkong and is expected to under-perform the KEISEI EL. But the stock apears to be less risky and, when comparing its historical volatility, The Hongkong and is 1.1 times less risky than KEISEI EL. The stock trades about -0.2 of its potential returns per unit of risk. The KEISEI EL RAILWAY is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 870.00 in KEISEI EL RAILWAY on October 28, 2024 and sell it today you would lose (5.00) from holding KEISEI EL RAILWAY or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hongkong and vs. KEISEI EL RAILWAY
Performance |
| Timeline |
| The Hongkong |
| KEISEI EL RAILWAY |
Hongkong and KEISEI EL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongkong and KEISEI EL
The main advantage of trading using opposite Hongkong and KEISEI EL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongkong position performs unexpectedly, KEISEI EL 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 KEISEI EL will offset losses from the drop in KEISEI EL's long position.| Hongkong vs. Jacquet Metal Service | Hongkong vs. Corporate Office Properties | Hongkong vs. Geely Automobile Holdings | Hongkong vs. Coeur Mining |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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