Correlation Between HUTCHISON TELECOMM and SOLSTAD OFFSHORE
Can any of the company-specific risk be diversified away by investing in both HUTCHISON TELECOMM and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUTCHISON TELECOMM and SOLSTAD OFFSHORE NK, you can compare the effects of market volatilities on HUTCHISON TELECOMM and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUTCHISON TELECOMM and SOLSTAD OFFSHORE.
Diversification Opportunities for HUTCHISON TELECOMM and SOLSTAD OFFSHORE
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between HUTCHISON and SOLSTAD is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHISON TELECOMM and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLSTAD OFFSHORE has no effect on the direction of HUTCHISON TELECOMM i.e., HUTCHISON TELECOMM and SOLSTAD OFFSHORE go up and down completely randomly.
Pair Corralation between HUTCHISON TELECOMM and SOLSTAD OFFSHORE
Assuming the 90 days trading horizon HUTCHISON TELECOMM is expected to under-perform the SOLSTAD OFFSHORE. In addition to that, HUTCHISON TELECOMM is 2.35 times more volatile than SOLSTAD OFFSHORE NK. It trades about -0.08 of its total potential returns per unit of risk. SOLSTAD OFFSHORE NK is currently generating about 0.09 per unit of volatility. If you would invest 336.00 in SOLSTAD OFFSHORE NK on October 20, 2024 and sell it today you would earn a total of 10.00 from holding SOLSTAD OFFSHORE NK or generate 2.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
HUTCHISON TELECOMM vs. SOLSTAD OFFSHORE NK
Performance |
| Timeline |
| HUTCHISON TELECOMM |
| SOLSTAD OFFSHORE |
HUTCHISON TELECOMM and SOLSTAD OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUTCHISON TELECOMM and SOLSTAD OFFSHORE
The main advantage of trading using opposite HUTCHISON TELECOMM and SOLSTAD OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUTCHISON TELECOMM position performs unexpectedly, SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE will offset losses from the drop in SOLSTAD OFFSHORE's long position.| HUTCHISON TELECOMM vs. Apple Inc | HUTCHISON TELECOMM vs. Apple Inc | HUTCHISON TELECOMM vs. Apple Inc | HUTCHISON TELECOMM vs. Apple Inc |
| SOLSTAD OFFSHORE vs. HUTCHISON TELECOMM | SOLSTAD OFFSHORE vs. Chengdu PUTIAN Telecommunications | SOLSTAD OFFSHORE vs. Cairo Communication SpA | SOLSTAD OFFSHORE vs. Shenandoah 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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