Correlation Between Hutchison Telecommunicatio and Australian Bond
Can any of the company-specific risk be diversified away by investing in both Hutchison Telecommunicatio and Australian Bond 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 Hutchison Telecommunicatio and Australian Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hutchison Telecommunications and Australian Bond Exchange, you can compare the effects of market volatilities on Hutchison Telecommunicatio and Australian Bond 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 Hutchison Telecommunicatio with a short position of Australian Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hutchison Telecommunicatio and Australian Bond.
Diversification Opportunities for Hutchison Telecommunicatio and Australian Bond
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hutchison and Australian is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hutchison Telecommunications and Australian Bond Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Bond Exchange and Hutchison Telecommunicatio 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 Hutchison Telecommunications are associated (or correlated) with Australian Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Bond Exchange has no effect on the direction of Hutchison Telecommunicatio i.e., Hutchison Telecommunicatio and Australian Bond go up and down completely randomly.
Pair Corralation between Hutchison Telecommunicatio and Australian Bond
Assuming the 90 days trading horizon Hutchison Telecommunications is expected to generate 0.5 times more return on investment than Australian Bond. However, Hutchison Telecommunications is 2.0 times less risky than Australian Bond. It trades about 0.0 of its potential returns per unit of risk. Australian Bond Exchange is currently generating about -0.01 per unit of risk. If you would invest 5.60 in Hutchison Telecommunications on November 19, 2024 and sell it today you would lose (3.20) from holding Hutchison Telecommunications or give up 57.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hutchison Telecommunications vs. Australian Bond Exchange
Performance |
| Timeline |
| Hutchison Telecommunicatio |
| Australian Bond Exchange |
Hutchison Telecommunicatio and Australian Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hutchison Telecommunicatio and Australian Bond
The main advantage of trading using opposite Hutchison Telecommunicatio and Australian Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hutchison Telecommunicatio position performs unexpectedly, Australian Bond 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 Australian Bond will offset losses from the drop in Australian Bond's long position.| Hutchison Telecommunicatio vs. Nufarm Finance NZ | Hutchison Telecommunicatio vs. Centaurus Metals | Hutchison Telecommunicatio vs. Health and Plant | Hutchison Telecommunicatio vs. Sky Metals |
| Australian Bond vs. Nex Metals Explorations | Australian Bond vs. FireFly Metals | Australian Bond vs. Cleanaway Waste Management | Australian Bond vs. Aurelia Metals |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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