Correlation Between HUTCHISON TELECOMM and ORIX JREIT

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

By analyzing existing cross correlation between HUTCHISON TELECOMM and ORIX JREIT INC, you can compare the effects of market volatilities on HUTCHISON TELECOMM and ORIX JREIT 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 ORIX JREIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUTCHISON TELECOMM and ORIX JREIT.

Diversification Opportunities for HUTCHISON TELECOMM and ORIX JREIT

-0.64

Correlation Coefficient

HUTCHISON TELECOMM  ORIX JREIT

Excellent diversification

The 3 months correlation between HUTCHISON and ORIX is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHISON TELECOMM and ORIX JREIT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORIX JREIT INC 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 ORIX JREIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORIX JREIT INC has no effect on the direction of HUTCHISON TELECOMM i.e., HUTCHISON TELECOMM and ORIX JREIT go up and down completely randomly.

Pair Corralation between HUTCHISON TELECOMM and ORIX JREIT

Assuming the 90 days trading horizon HUTCHISON TELECOMM is expected to under-perform the ORIX JREIT. In addition to that, HUTCHISON TELECOMM is 3.32 times more volatile than ORIX JREIT INC. It trades about -0.1 of its total potential returns per unit of risk. ORIX JREIT INC is currently generating about 0.16 per unit of volatility. If you would invest  94,372  in ORIX JREIT INC on December 22, 2024 and sell it today you would earn a total of  11,628  from holding ORIX JREIT INC or generate 12.32% return on investment over 90 days.

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

HUTCHISON TELECOMM  vs.  ORIX JREIT INC

HUTCHISON TELECOMM

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ORIX JREIT INC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ORIX JREIT INC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ORIX JREIT reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HUTCHISON TELECOMM and ORIX JREIT

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

The idea behind HUTCHISON TELECOMM and ORIX JREIT INC 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.