Correlation Between ÜSTRA Hannoversche and HK Electric
Can any of the company-specific risk be diversified away by investing in both ÜSTRA Hannoversche and HK Electric 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 ÜSTRA Hannoversche and HK Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRA Hannoversche Verkehrsbetriebe and HK Electric Investments, you can compare the effects of market volatilities on ÜSTRA Hannoversche and HK Electric 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 ÜSTRA Hannoversche with a short position of HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of ÜSTRA Hannoversche and HK Electric.
Diversification Opportunities for ÜSTRA Hannoversche and HK Electric
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ÜSTRA and HKT is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding STRA Hannoversche Verkehrsbetr and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric Investments and ÜSTRA Hannoversche 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 STRA Hannoversche Verkehrsbetriebe are associated (or correlated) with HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of ÜSTRA Hannoversche i.e., ÜSTRA Hannoversche and HK Electric go up and down completely randomly.
Pair Corralation between ÜSTRA Hannoversche and HK Electric
Assuming the 90 days horizon STRA Hannoversche Verkehrsbetriebe is expected to under-perform the HK Electric. In addition to that, ÜSTRA Hannoversche is 1.13 times more volatile than HK Electric Investments. It trades about -0.02 of its total potential returns per unit of risk. HK Electric Investments is currently generating about 0.12 per unit of volatility. If you would invest 28.00 in HK Electric Investments on September 3, 2024 and sell it today you would earn a total of 35.00 from holding HK Electric Investments or generate 125.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRA Hannoversche Verkehrsbetr vs. HK Electric Investments
Performance |
| Timeline |
| ÜSTRA Hannoversche |
| HK Electric Investments |
ÜSTRA Hannoversche and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ÜSTRA Hannoversche and HK Electric
The main advantage of trading using opposite ÜSTRA Hannoversche and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ÜSTRA Hannoversche position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric's long position.| ÜSTRA Hannoversche vs. FUTURE GAMING GRP | ÜSTRA Hannoversche vs. 24SEVENOFFICE GROUP AB | ÜSTRA Hannoversche vs. Games Workshop Group | ÜSTRA Hannoversche vs. MTI WIRELESS EDGE |
| HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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