Correlation Between Hutchison Telecommunicatio and Sky Metals
Can any of the company-specific risk be diversified away by investing in both Hutchison Telecommunicatio and Sky Metals 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 Sky Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hutchison Telecommunications and Sky Metals, you can compare the effects of market volatilities on Hutchison Telecommunicatio and Sky Metals 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 Sky Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hutchison Telecommunicatio and Sky Metals.
Diversification Opportunities for Hutchison Telecommunicatio and Sky Metals
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hutchison and Sky is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hutchison Telecommunications and Sky Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sky Metals 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 Sky Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sky Metals has no effect on the direction of Hutchison Telecommunicatio i.e., Hutchison Telecommunicatio and Sky Metals go up and down completely randomly.
Pair Corralation between Hutchison Telecommunicatio and Sky Metals
Assuming the 90 days trading horizon Hutchison Telecommunicatio is expected to generate 3.68 times less return on investment than Sky Metals. In addition to that, Hutchison Telecommunicatio is 1.38 times more volatile than Sky Metals. It trades about 0.01 of its total potential returns per unit of risk. Sky Metals is currently generating about 0.05 per unit of volatility. If you would invest 3.60 in Sky Metals on September 2, 2024 and sell it today you would earn a total of 1.50 from holding Sky Metals or generate 41.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hutchison Telecommunications vs. Sky Metals
Performance |
| Timeline |
| Hutchison Telecommunicatio |
| Sky Metals |
Hutchison Telecommunicatio and Sky Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hutchison Telecommunicatio and Sky Metals
The main advantage of trading using opposite Hutchison Telecommunicatio and Sky Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hutchison Telecommunicatio position performs unexpectedly, Sky Metals 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 Sky Metals will offset losses from the drop in Sky Metals' long position.| Hutchison Telecommunicatio vs. Skycity Entertainment Group | Hutchison Telecommunicatio vs. Collins Foods | Hutchison Telecommunicatio vs. Gold Road Resources | Hutchison Telecommunicatio vs. Iron Road |
| Sky Metals vs. Northern Star Resources | Sky Metals vs. Evolution Mining | Sky Metals vs. Bluescope Steel | Sky Metals vs. Sandfire Resources NL |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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