Correlation Between CHINA TELECOM and HF FOODS
Can any of the company-specific risk be diversified away by investing in both CHINA TELECOM and HF FOODS 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 CHINA TELECOM and HF FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA TELECOM H and HF FOODS GRP, you can compare the effects of market volatilities on CHINA TELECOM and HF FOODS 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 CHINA TELECOM with a short position of HF FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TELECOM and HF FOODS.
Diversification Opportunities for CHINA TELECOM and HF FOODS
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between CHINA and 3GX is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TELECOM H and HF FOODS GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF FOODS GRP and CHINA TELECOM 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 CHINA TELECOM H are associated (or correlated) with HF FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF FOODS GRP has no effect on the direction of CHINA TELECOM i.e., CHINA TELECOM and HF FOODS go up and down completely randomly.
Pair Corralation between CHINA TELECOM and HF FOODS
Assuming the 90 days trading horizon CHINA TELECOM H is expected to generate 0.97 times more return on investment than HF FOODS. However, CHINA TELECOM H is 1.03 times less risky than HF FOODS. It trades about 0.1 of its potential returns per unit of risk. HF FOODS GRP is currently generating about 0.02 per unit of risk. If you would invest 10.00 in CHINA TELECOM H on September 20, 2024 and sell it today you would earn a total of 42.00 from holding CHINA TELECOM H or generate 420.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA TELECOM H vs. HF FOODS GRP
Performance |
| Timeline |
| CHINA TELECOM H |
| HF FOODS GRP |
CHINA TELECOM and HF FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TELECOM and HF FOODS
The main advantage of trading using opposite CHINA TELECOM and HF FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TELECOM position performs unexpectedly, HF FOODS 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 HF FOODS will offset losses from the drop in HF FOODS's long position.| CHINA TELECOM vs. Choice Hotels International | CHINA TELECOM vs. MELIA HOTELS | CHINA TELECOM vs. InterContinental Hotels Group | CHINA TELECOM vs. INTERCONT HOTELS |
| HF FOODS vs. Metro AG | HF FOODS vs. Superior Plus Corp | HF FOODS vs. SIVERS SEMICONDUCTORS AB | HF FOODS vs. NorAm Drilling AS |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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