Correlation Between GAMING FAC and HK Electric
Can any of the company-specific risk be diversified away by investing in both GAMING FAC 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 GAMING FAC and HK Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMING FAC SA and HK Electric Investments, you can compare the effects of market volatilities on GAMING FAC 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 GAMING FAC with a short position of HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and HK Electric.
Diversification Opportunities for GAMING FAC and HK Electric
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GAMING and HKT is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA 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 GAMING FAC 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 GAMING FAC SA 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 GAMING FAC i.e., GAMING FAC and HK Electric go up and down completely randomly.
Pair Corralation between GAMING FAC and HK Electric
Assuming the 90 days horizon GAMING FAC SA is expected to under-perform the HK Electric. In addition to that, GAMING FAC is 1.77 times more volatile than HK Electric Investments. It trades about -0.22 of its total potential returns per unit of risk. HK Electric Investments is currently generating about 0.01 per unit of volatility. If you would invest 64.00 in HK Electric Investments on September 26, 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 Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GAMING FAC SA vs. HK Electric Investments
Performance |
Timeline |
GAMING FAC SA |
HK Electric Investments |
GAMING FAC and HK Electric Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GAMING FAC and HK Electric
The main advantage of trading using opposite GAMING FAC and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMING FAC 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.GAMING FAC vs. MGIC INVESTMENT | GAMING FAC vs. SERI INDUSTRIAL EO | GAMING FAC vs. PennantPark Investment | GAMING FAC vs. SEI INVESTMENTS |
HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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