Correlation Between EVE Health and Hutchison Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both EVE Health 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 EVE Health and Hutchison Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EVE Health Group and Hutchison Telecommunications, you can compare the effects of market volatilities on EVE Health 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 EVE Health with a short position of Hutchison Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVE Health and Hutchison Telecommunicatio.

Diversification Opportunities for EVE Health and Hutchison Telecommunicatio

0.0

Correlation Coefficient

EVE Health  Hutchison Telecommunicatio

Pay attention - limited upside

The 3 months correlation between EVE and Hutchison is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EVE Health Group and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio and EVE Health 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 EVE Health Group 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 EVE Health i.e., EVE Health and Hutchison Telecommunicatio go up and down completely randomly.

Pair Corralation between EVE Health and Hutchison Telecommunicatio

Assuming the 90 days trading horizon EVE Health Group is expected to generate 0.72 times more return on investment than Hutchison Telecommunicatio. However, EVE Health Group is 1.4 times less risky than Hutchison Telecommunicatio. It trades about 0.02 of its potential returns per unit of risk. Hutchison Telecommunications is currently generating about 0.0 per unit of risk. If you would invest  0.10  in EVE Health Group on October 4, 2024 and sell it today you would earn a total of  0.00  from holding EVE Health Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

EVE Health Group  vs.  Hutchison Telecommunications

EVE Health Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EVE Health Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, EVE Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Hutchison Telecommunicatio

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hutchison Telecommunications are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hutchison Telecommunicatio may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with EVE Health and Hutchison Telecommunicatio

The main advantage of trading using opposite EVE Health and Hutchison Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVE Health 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.

The idea behind EVE Health Group and Hutchison Telecommunications 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.