Correlation Between Hutchison Telecommunicatio and FSA
Can any of the company-specific risk be diversified away by investing in both Hutchison Telecommunicatio and FSA 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 FSA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hutchison Telecommunications and FSA Group, you can compare the effects of market volatilities on Hutchison Telecommunicatio and FSA 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 FSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hutchison Telecommunicatio and FSA.
Diversification Opportunities for Hutchison Telecommunicatio and FSA
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hutchison and FSA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hutchison Telecommunications and FSA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSA Group 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 FSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSA Group has no effect on the direction of Hutchison Telecommunicatio i.e., Hutchison Telecommunicatio and FSA go up and down completely randomly.
Pair Corralation between Hutchison Telecommunicatio and FSA
Assuming the 90 days trading horizon Hutchison Telecommunications is expected to generate 3.88 times more return on investment than FSA. However, Hutchison Telecommunicatio is 3.88 times more volatile than FSA Group. It trades about 0.0 of its potential returns per unit of risk. FSA Group is currently generating about -0.01 per unit of risk. If you would invest 5.90 in Hutchison Telecommunications on October 28, 2024 and sell it today you would lose (3.10) from holding Hutchison Telecommunications or give up 52.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hutchison Telecommunications vs. FSA Group
Performance |
| Timeline |
| Hutchison Telecommunicatio |
| FSA Group |
Hutchison Telecommunicatio and FSA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hutchison Telecommunicatio and FSA
The main advantage of trading using opposite Hutchison Telecommunicatio and FSA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hutchison Telecommunicatio position performs unexpectedly, FSA 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 FSA will offset losses from the drop in FSA's long position.| Hutchison Telecommunicatio vs. Djerriwarrh Investments | Hutchison Telecommunicatio vs. MFF Capital Investments | Hutchison Telecommunicatio vs. Arc Funds | Hutchison Telecommunicatio vs. BKI Investment |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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