Correlation Between MA Financial and Hutchison Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both MA Financial and Hutchison Telecommunicatio 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 MA Financial and Hutchison Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MA Financial Group and Hutchison Telecommunications, you can compare the effects of market volatilities on MA Financial and Hutchison Telecommunicatio 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 MA Financial with a short position of Hutchison Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of MA Financial and Hutchison Telecommunicatio.
Diversification Opportunities for MA Financial and Hutchison Telecommunicatio
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAF and Hutchison is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding MA Financial Group and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio and MA Financial 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 MA Financial Group are associated (or correlated) with Hutchison Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hutchison Telecommunicatio has no effect on the direction of MA Financial i.e., MA Financial and Hutchison Telecommunicatio go up and down completely randomly.
Pair Corralation between MA Financial and Hutchison Telecommunicatio
Assuming the 90 days trading horizon MA Financial Group is expected to generate 0.52 times more return on investment than Hutchison Telecommunicatio. However, MA Financial Group is 1.91 times less risky than Hutchison Telecommunicatio. It trades about 0.02 of its potential returns per unit of risk. Hutchison Telecommunications is currently generating about -0.11 per unit of risk. If you would invest 641.00 in MA Financial Group on August 28, 2024 and sell it today you would earn a total of 4.00 from holding MA Financial Group or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MA Financial Group vs. Hutchison Telecommunications
Performance |
| Timeline |
| MA Financial Group |
| Hutchison Telecommunicatio |
MA Financial and Hutchison Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MA Financial and Hutchison Telecommunicatio
The main advantage of trading using opposite MA Financial and Hutchison Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MA Financial position performs unexpectedly, Hutchison Telecommunicatio 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 Hutchison Telecommunicatio will offset losses from the drop in Hutchison Telecommunicatio's long position.| MA Financial vs. Renascor Resources | MA Financial vs. Venus Metals | MA Financial vs. Havilah Resources | MA Financial vs. Asara Resources |
| Hutchison Telecommunicatio vs. Macquarie Group | Hutchison Telecommunicatio vs. CSL | Hutchison Telecommunicatio vs. Commonwealth Bank of | Hutchison Telecommunicatio vs. Commonwealth Bank of |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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