Correlation Between Hutchison Telecommunicatio and Hansen Technologies

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

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

Diversification Opportunities for Hutchison Telecommunicatio and Hansen Technologies

-0.44

Correlation Coefficient

Hutchison Telecommunicatio  Hansen Technologies

Very good diversification

The 3 months correlation between Hutchison and Hansen is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hutchison Telecommunications and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies and Hutchison Telecommunicatio 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 Hutchison Telecommunications are associated (or correlated) with Hansen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansen Technologies has no effect on the direction of Hutchison Telecommunicatio i.e., Hutchison Telecommunicatio and Hansen Technologies go up and down completely randomly.

Pair Corralation between Hutchison Telecommunicatio and Hansen Technologies

Assuming the 90 days trading horizon Hutchison Telecommunications is expected to under-perform the Hansen Technologies. In addition to that, Hutchison Telecommunicatio is 3.9 times more volatile than Hansen Technologies. It trades about -0.02 of its total potential returns per unit of risk. Hansen Technologies is currently generating about -0.07 per unit of volatility. If you would invest  534.00  in Hansen Technologies on October 23, 2024 and sell it today you would lose (9.00) from holding Hansen Technologies or give up 1.69% of portfolio value over 90 days.

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

Hutchison Telecommunications  vs.  Hansen Technologies

Hutchison Telecommunicatio

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hutchison Telecommunications are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hutchison Telecommunicatio unveiled solid returns over the last few months and may actually be approaching a breakup point.

Hansen Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hansen Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hansen Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hutchison Telecommunicatio and Hansen Technologies

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

The idea behind Hutchison Telecommunications and Hansen Technologies 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.