Correlation Between HUTCHISON TELECOMM and GameStop Corp

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

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

Diversification Opportunities for HUTCHISON TELECOMM and GameStop Corp

-0.2

Correlation Coefficient

HUTCHISON TELECOMM  GameStop Corp

Good diversification

The 3 months correlation between HUTCHISON and GameStop is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHISON TELECOMM and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp and HUTCHISON TELECOMM 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 TELECOMM are associated (or correlated) with GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of HUTCHISON TELECOMM i.e., HUTCHISON TELECOMM and GameStop Corp go up and down completely randomly.

Pair Corralation between HUTCHISON TELECOMM and GameStop Corp

Assuming the 90 days trading horizon HUTCHISON TELECOMM is expected to generate 2.77 times less return on investment than GameStop Corp. In addition to that, HUTCHISON TELECOMM is 1.04 times more volatile than GameStop Corp. It trades about 0.07 of its total potential returns per unit of risk. GameStop Corp is currently generating about 0.2 per unit of volatility. If you would invest  2,692  in GameStop Corp on October 9, 2024 and sell it today you would earn a total of  345.00  from holding GameStop Corp or generate 12.82% return on investment over 90 days.

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

HUTCHISON TELECOMM  vs.  GameStop Corp

HUTCHISON TELECOMM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUTCHISON TELECOMM has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

GameStop Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GameStop Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, GameStop Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HUTCHISON TELECOMM and GameStop Corp

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

The idea behind HUTCHISON TELECOMM and GameStop Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.