Correlation Between HUTCHISON TELECOMM and CSL
Can any of the company-specific risk be diversified away by investing in both HUTCHISON TELECOMM and CSL 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 TELECOMM and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUTCHISON TELECOMM and CSL Limited, you can compare the effects of market volatilities on HUTCHISON TELECOMM and CSL 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 TELECOMM with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUTCHISON TELECOMM and CSL.
Diversification Opportunities for HUTCHISON TELECOMM and CSL
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between HUTCHISON and CSL is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHISON TELECOMM and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited and HUTCHISON TELECOMM 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 TELECOMM are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of HUTCHISON TELECOMM i.e., HUTCHISON TELECOMM and CSL go up and down completely randomly.
Pair Corralation between HUTCHISON TELECOMM and CSL
Assuming the 90 days trading horizon HUTCHISON TELECOMM is expected to generate 3.32 times more return on investment than CSL. However, HUTCHISON TELECOMM is 3.32 times more volatile than CSL Limited. It trades about 0.02 of its potential returns per unit of risk. CSL Limited is currently generating about -0.12 per unit of risk. If you would invest 1.40 in HUTCHISON TELECOMM on October 26, 2024 and sell it today you would earn a total of 0.00 from holding HUTCHISON TELECOMM or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HUTCHISON TELECOMM vs. CSL Limited
Performance |
| Timeline |
| HUTCHISON TELECOMM |
| CSL Limited |
HUTCHISON TELECOMM and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUTCHISON TELECOMM and CSL
The main advantage of trading using opposite HUTCHISON TELECOMM and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUTCHISON TELECOMM position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| HUTCHISON TELECOMM vs. Apple Inc | HUTCHISON TELECOMM vs. Apple Inc | HUTCHISON TELECOMM vs. Apple Inc | HUTCHISON TELECOMM vs. Apple Inc |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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