Correlation Between Hong Kong and Hong Kong

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

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

Diversification Opportunities for Hong Kong and Hong Kong

0.8

Correlation Coefficient

Hong Kong  Hong Kong

Very poor diversification

The 3 months correlation between Hong and Hong is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Exchanges and Hong Kong Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Exchange and Hong Kong 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 Hong Kong Exchanges are associated (or correlated) with Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Exchange has no effect on the direction of Hong Kong i.e., Hong Kong and Hong Kong go up and down completely randomly.

Pair Corralation between Hong Kong and Hong Kong

Assuming the 90 days horizon Hong Kong Exchanges is expected to generate 1.33 times more return on investment than Hong Kong. However, Hong Kong is 1.33 times more volatile than Hong Kong Exchange. It trades about 0.1 of its potential returns per unit of risk. Hong Kong Exchange is currently generating about 0.1 per unit of risk. If you would invest  3,079  in Hong Kong Exchanges on September 19, 2024 and sell it today you would earn a total of  900.00  from holding Hong Kong Exchanges or generate 29.23% return on investment over 90 days.

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

Hong Kong Exchanges  vs.  Hong Kong Exchange

Hong Kong Exchanges

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hong Kong Exchanges are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Hong Kong reported solid returns over the last few months and may actually be approaching a breakup point.

Hong Kong Exchange

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hong Kong Exchange are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Hong Kong showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hong Kong and Hong Kong

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

The idea behind Hong Kong Exchanges and Hong Kong Exchange 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.