Correlation Between Xinhua Winshare and HK Electric
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare 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 Xinhua Winshare and HK Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinhua Winshare Publishing and HK Electric Investments, you can compare the effects of market volatilities on Xinhua Winshare 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 Xinhua Winshare with a short position of HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and HK Electric.
Diversification Opportunities for Xinhua Winshare and HK Electric
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinhua and HKT is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing 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 Xinhua Winshare 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 Xinhua Winshare Publishing 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 Xinhua Winshare i.e., Xinhua Winshare and HK Electric go up and down completely randomly.
Pair Corralation between Xinhua Winshare and HK Electric
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to under-perform the HK Electric. In addition to that, Xinhua Winshare is 3.99 times more volatile than HK Electric Investments. It trades about -0.1 of its total potential returns per unit of risk. HK Electric Investments is currently generating about 0.0 per unit of volatility. If you would invest 65.00 in HK Electric Investments on November 6, 2024 and sell it today you would earn a total of 0.00 from holding HK Electric Investments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. HK Electric Investments
Performance |
| Timeline |
| Xinhua Winshare Publ |
| HK Electric Investments |
Xinhua Winshare and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and HK Electric
The main advantage of trading using opposite Xinhua Winshare and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare 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.| Xinhua Winshare vs. Osisko Metals | Xinhua Winshare vs. Aluminum of | Xinhua Winshare vs. CORNISH METALS INC | Xinhua Winshare vs. DETALION GAMES SA |
| HK Electric vs. SK TELECOM TDADR | HK Electric vs. Westinghouse Air Brake | HK Electric vs. Verizon Communications | HK Electric vs. AIR LIQUIDE ADR |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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