Correlation Between CLP Holdings and Hong Kong

Can any of the company-specific risk be diversified away by investing in both CLP Holdings and Hong Kong 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 CLP Holdings and Hong Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CLP Holdings and Hong Kong And, you can compare the effects of market volatilities on CLP Holdings and Hong Kong 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 CLP Holdings with a short position of Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLP Holdings and Hong Kong.

Diversification Opportunities for CLP Holdings and Hong Kong

0.0

Correlation Coefficient

CLP Holdings  Hong Kong

Pay attention - limited upside

The 3 months correlation between CLP and Hong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CLP Holdings and Hong Kong And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong And and CLP Holdings 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 CLP Holdings are associated (or correlated) with Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong And has no effect on the direction of CLP Holdings i.e., CLP Holdings and Hong Kong go up and down completely randomly.

Pair Corralation between CLP Holdings and Hong Kong

If you would invest  820.00  in CLP Holdings on December 17, 2024 and sell it today you would lose (1.00) from holding CLP Holdings or give up 0.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CLP Holdings  vs.  Hong Kong And

CLP Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days CLP Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, CLP Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hong Kong And

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hong Kong And has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Hong Kong is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CLP Holdings and Hong Kong

The main advantage of trading using opposite CLP Holdings and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLP Holdings position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.

The idea behind CLP Holdings and Hong Kong And pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.