Correlation Between Pact Group and Hutchison Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Pact Group 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 Pact Group and Hutchison Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pact Group Holdings and Hutchison Telecommunications, you can compare the effects of market volatilities on Pact Group 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 Pact Group with a short position of Hutchison Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pact Group and Hutchison Telecommunicatio.
Diversification Opportunities for Pact Group and Hutchison Telecommunicatio
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pact and Hutchison is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pact Group Holdings and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio and Pact Group 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 Pact Group Holdings 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 Pact Group i.e., Pact Group and Hutchison Telecommunicatio go up and down completely randomly.
Pair Corralation between Pact Group and Hutchison Telecommunicatio
Assuming the 90 days trading horizon Pact Group Holdings is expected to generate 0.49 times more return on investment than Hutchison Telecommunicatio. However, Pact Group Holdings is 2.06 times less risky than Hutchison Telecommunicatio. It trades about 0.0 of its potential returns per unit of risk. Hutchison Telecommunications is currently generating about 0.0 per unit of risk. If you would invest 127.00 in Pact Group Holdings on November 19, 2024 and sell it today you would lose (24.00) from holding Pact Group Holdings or give up 18.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pact Group Holdings vs. Hutchison Telecommunications
Performance |
| Timeline |
| Pact Group Holdings |
| Hutchison Telecommunicatio |
Pact Group and Hutchison Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pact Group and Hutchison Telecommunicatio
The main advantage of trading using opposite Pact Group and Hutchison Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pact Group 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.| Pact Group vs. Nex Metals Explorations | Pact Group vs. Centrex Metals | Pact Group vs. Aussie Broadband | Pact Group vs. Stelar Metals |
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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 Stocks Directory module to find actively traded stocks across global markets.
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