Correlation Between Hang Lung and ECHO INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Hang Lung and ECHO INVESTMENT 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 Hang Lung and ECHO INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hang Lung Group and ECHO INVESTMENT ZY, you can compare the effects of market volatilities on Hang Lung and ECHO INVESTMENT 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 Hang Lung with a short position of ECHO INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hang Lung and ECHO INVESTMENT.
Diversification Opportunities for Hang Lung and ECHO INVESTMENT
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hang and ECHO is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hang Lung Group and ECHO INVESTMENT ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECHO INVESTMENT ZY and Hang Lung 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 Hang Lung Group are associated (or correlated) with ECHO INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECHO INVESTMENT ZY has no effect on the direction of Hang Lung i.e., Hang Lung and ECHO INVESTMENT go up and down completely randomly.
Pair Corralation between Hang Lung and ECHO INVESTMENT
Assuming the 90 days horizon Hang Lung Group is expected to generate 1.3 times more return on investment than ECHO INVESTMENT. However, Hang Lung is 1.3 times more volatile than ECHO INVESTMENT ZY. It trades about 0.08 of its potential returns per unit of risk. ECHO INVESTMENT ZY is currently generating about -0.06 per unit of risk. If you would invest 127.00 in Hang Lung Group on December 27, 2024 and sell it today you would earn a total of 12.00 from holding Hang Lung Group or generate 9.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Hang Lung Group vs. ECHO INVESTMENT ZY
Performance |
Timeline |
Hang Lung Group |
ECHO INVESTMENT ZY |
Hang Lung and ECHO INVESTMENT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hang Lung and ECHO INVESTMENT
The main advantage of trading using opposite Hang Lung and ECHO INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hang Lung position performs unexpectedly, ECHO INVESTMENT 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 ECHO INVESTMENT will offset losses from the drop in ECHO INVESTMENT's long position.Hang Lung vs. 24SEVENOFFICE GROUP AB | Hang Lung vs. Nippon Steel | Hang Lung vs. IRONVELD PLC LS | Hang Lung vs. MOUNT GIBSON IRON |
ECHO INVESTMENT vs. Alibaba Health Information | ECHO INVESTMENT vs. Cass Information Systems | ECHO INVESTMENT vs. Elmos Semiconductor SE | ECHO INVESTMENT vs. Stewart Information Services |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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