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This module allows you to analyze existing cross correlation between Hang Seng and Bovespa. You can compare the effects of market volatilities on Hang Seng and Bovespa 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 Seng with a short position of Bovespa. See also your portfolio center. Please also check ongoing floating volatility patterns of Hang Seng and Bovespa.
|Horizon||30 Days Login to change|
Predicted Return Density
Hang Seng vs. Bovespa
Given the investment horizon of 30 days, Hang Seng is expected to generate 0.47 times more return on investment than Bovespa. However, Hang Seng is 2.11 times less risky than Bovespa. It trades about 0.35 of its potential returns per unit of risk. Bovespa is currently generating about 0.01 per unit of risk. If you would invest 2,575,342 in Hang Seng on January 20, 2019 and sell it today you would earn a total of 247,471 from holding Hang Seng or generate 9.61% return on investment over 30 days.
Pair Corralation between Hang Seng and Bovespa
|Time Period||2 Months [change]|
Diversification Opportunities for Hang Seng and Bovespa
Overlapping area represents the amount of risk that can be diversified away by holding Hang Seng and Bovespa in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Bovespa and Hang Seng 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 Seng are associated (or correlated) with Bovespa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bovespa has no effect on the direction of Hang Seng i.e. Hang Seng and Bovespa go up and down completely randomly.