Correlation Between Hutchison Telecommunicatio and Aurum Resources
Can any of the company-specific risk be diversified away by investing in both Hutchison Telecommunicatio and Aurum Resources 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 Aurum Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hutchison Telecommunications and Aurum Resources, you can compare the effects of market volatilities on Hutchison Telecommunicatio and Aurum Resources 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 Aurum Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hutchison Telecommunicatio and Aurum Resources.
Diversification Opportunities for Hutchison Telecommunicatio and Aurum Resources
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hutchison and Aurum is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hutchison Telecommunications and Aurum Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurum Resources 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 Aurum Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurum Resources has no effect on the direction of Hutchison Telecommunicatio i.e., Hutchison Telecommunicatio and Aurum Resources go up and down completely randomly.
Pair Corralation between Hutchison Telecommunicatio and Aurum Resources
Assuming the 90 days trading horizon Hutchison Telecommunications is expected to generate 0.9 times more return on investment than Aurum Resources. However, Hutchison Telecommunications is 1.12 times less risky than Aurum Resources. It trades about -0.15 of its potential returns per unit of risk. Aurum Resources is currently generating about -0.19 per unit of risk. If you would invest 2.90 in Hutchison Telecommunications on August 29, 2024 and sell it today you would lose (0.40) from holding Hutchison Telecommunications or give up 13.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hutchison Telecommunications vs. Aurum Resources
Performance |
| Timeline |
| Hutchison Telecommunicatio |
| Aurum Resources |
Hutchison Telecommunicatio and Aurum Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hutchison Telecommunicatio and Aurum Resources
The main advantage of trading using opposite Hutchison Telecommunicatio and Aurum Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hutchison Telecommunicatio position performs unexpectedly, Aurum Resources 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 Aurum Resources will offset losses from the drop in Aurum Resources' long position.| Hutchison Telecommunicatio vs. PVW Resources | Hutchison Telecommunicatio vs. Woolworths | Hutchison Telecommunicatio vs. Wesfarmers | Hutchison Telecommunicatio vs. Coles Group |
| Aurum Resources vs. Apiam Animal Health | Aurum Resources vs. Oceania Healthcare | Aurum Resources vs. AiMedia Technologies | Aurum Resources vs. Hutchison Telecommunications |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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