Correlation Between Hutchison Telecommunicatio and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both Hutchison Telecommunicatio and Ainsworth Game 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 Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hutchison Telecommunications and Ainsworth Game Technology, you can compare the effects of market volatilities on Hutchison Telecommunicatio and Ainsworth Game 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 Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hutchison Telecommunicatio and Ainsworth Game.
Diversification Opportunities for Hutchison Telecommunicatio and Ainsworth Game
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hutchison and Ainsworth is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hutchison Telecommunications and Ainsworth Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainsworth Game Technology 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 Ainsworth Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainsworth Game Technology has no effect on the direction of Hutchison Telecommunicatio i.e., Hutchison Telecommunicatio and Ainsworth Game go up and down completely randomly.
Pair Corralation between Hutchison Telecommunicatio and Ainsworth Game
Assuming the 90 days trading horizon Hutchison Telecommunications is expected to under-perform the Ainsworth Game. In addition to that, Hutchison Telecommunicatio is 1.51 times more volatile than Ainsworth Game Technology. It trades about -0.15 of its total potential returns per unit of risk. Ainsworth Game Technology is currently generating about 0.11 per unit of volatility. If you would invest 71.00 in Ainsworth Game Technology on September 2, 2024 and sell it today you would earn a total of 4.00 from holding Ainsworth Game Technology or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hutchison Telecommunications vs. Ainsworth Game Technology
Performance |
| Timeline |
| Hutchison Telecommunicatio |
| Ainsworth Game Technology |
Hutchison Telecommunicatio and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hutchison Telecommunicatio and Ainsworth Game
The main advantage of trading using opposite Hutchison Telecommunicatio and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hutchison Telecommunicatio position performs unexpectedly, Ainsworth Game 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 Ainsworth Game will offset losses from the drop in Ainsworth Game's long position.| Hutchison Telecommunicatio vs. Skycity Entertainment Group | Hutchison Telecommunicatio vs. Collins Foods | Hutchison Telecommunicatio vs. Gold Road Resources | Hutchison Telecommunicatio vs. Iron Road |
| Ainsworth Game vs. iShares Global Healthcare | Ainsworth Game vs. Australian Dairy Farms | Ainsworth Game vs. Adriatic Metals Plc | Ainsworth Game vs. Australian Agricultural |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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