Correlation Between Yuexiu Transport and HUTCHISON TELECOMM

Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and HUTCHISON TELECOMM 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 Yuexiu Transport and HUTCHISON TELECOMM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yuexiu Transport Infrastructure and HUTCHISON TELECOMM, you can compare the effects of market volatilities on Yuexiu Transport and HUTCHISON TELECOMM 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 Yuexiu Transport with a short position of HUTCHISON TELECOMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and HUTCHISON TELECOMM.

Diversification Opportunities for Yuexiu Transport and HUTCHISON TELECOMM

-0.18

Correlation Coefficient

Yuexiu Transport  HUTCHISON TELECOMM

Good diversification

The 3 months correlation between Yuexiu and HUTCHISON is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and HUTCHISON TELECOMM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUTCHISON TELECOMM and Yuexiu Transport 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 Yuexiu Transport Infrastructure are associated (or correlated) with HUTCHISON TELECOMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUTCHISON TELECOMM has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and HUTCHISON TELECOMM go up and down completely randomly.

Pair Corralation between Yuexiu Transport and HUTCHISON TELECOMM

Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to under-perform the HUTCHISON TELECOMM. But the stock apears to be less risky and, when comparing its historical volatility, Yuexiu Transport Infrastructure is 2.22 times less risky than HUTCHISON TELECOMM. The stock trades about -0.13 of its potential returns per unit of risk. The HUTCHISON TELECOMM is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1.40  in HUTCHISON TELECOMM on October 26, 2024 and sell it today you would earn a total of  0.00  from holding HUTCHISON TELECOMM or generate 0.0% return on investment over 90 days.

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

Yuexiu Transport Infrastructur  vs.  HUTCHISON TELECOMM

Yuexiu Transport Inf

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuexiu Transport Infrastructure are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Yuexiu Transport reported solid returns over the last few months and may actually be approaching a breakup point.

HUTCHISON TELECOMM

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HUTCHISON TELECOMM are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, HUTCHISON TELECOMM is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Yuexiu Transport and HUTCHISON TELECOMM

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

The idea behind Yuexiu Transport Infrastructure and HUTCHISON TELECOMM 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 Commodity Directory module to find actively traded commodities issued by global exchanges.