Correlation Between Santana Minerals and Hutchison Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Santana Minerals 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 Santana Minerals and Hutchison Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santana Minerals and Hutchison Telecommunications, you can compare the effects of market volatilities on Santana Minerals 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 Santana Minerals with a short position of Hutchison Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santana Minerals and Hutchison Telecommunicatio.
Diversification Opportunities for Santana Minerals and Hutchison Telecommunicatio
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Santana and Hutchison is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Santana Minerals and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio and Santana Minerals 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 Santana Minerals 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 Santana Minerals i.e., Santana Minerals and Hutchison Telecommunicatio go up and down completely randomly.
Pair Corralation between Santana Minerals and Hutchison Telecommunicatio
Assuming the 90 days trading horizon Santana Minerals is expected to generate 0.82 times more return on investment than Hutchison Telecommunicatio. However, Santana Minerals is 1.22 times less risky than Hutchison Telecommunicatio. It trades about 0.05 of its potential returns per unit of risk. Hutchison Telecommunications is currently generating about 0.0 per unit of risk. If you would invest 27.00 in Santana Minerals on October 16, 2024 and sell it today you would earn a total of 20.00 from holding Santana Minerals or generate 74.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santana Minerals vs. Hutchison Telecommunications
Performance |
| Timeline |
| Santana Minerals |
| Hutchison Telecommunicatio |
Santana Minerals and Hutchison Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santana Minerals and Hutchison Telecommunicatio
The main advantage of trading using opposite Santana Minerals and Hutchison Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santana Minerals 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.| Santana Minerals vs. Hutchison Telecommunications | Santana Minerals vs. Air New Zealand | Santana Minerals vs. Australian Agricultural | Santana Minerals vs. Nufarm Finance NZ |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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