Correlation Between CHINA GAS and Hong Kong

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

Specify exactly 2 symbols:

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

Diversification Opportunities for CHINA GAS and Hong Kong

0.39
  Correlation Coefficient
CHINA GAS HOLDINGS
Hong Kong China

Weak diversification

The 3 months correlation between CHINA and HOKCF is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CHINA GAS HOLDINGS and Hong Kong China in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong China and CHINA GAS 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 CHINA GAS HOLDINGS 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 China has no effect on the direction of CHINA GAS i.e., CHINA GAS and Hong Kong go up and down completely randomly.

Pair Corralation between CHINA GAS and Hong Kong

Assuming the 90 days horizon CHINA GAS is expected to generate 350.44 times less return on investment than Hong Kong. But when comparing it to its historical volatility, CHINA GAS HOLDINGS is 189.46 times less risky than Hong Kong. It trades about 0.17 of its potential returns per unit of risk. Hong Kong China is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  145.00  in Hong Kong China on May 5, 2021 and sell it today you would earn a total of  18.00  from holding Hong Kong China or generate 12.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy85.71%
ValuesDaily Returns

CHINA GAS HOLDINGS  vs.  Hong Kong China

 Performance (%) 
      Timeline 
CHINA GAS HOLDINGS 
 CHINA Performance
0 of 100
Over the last 90 days CHINA GAS HOLDINGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

CHINA Price Channel

Hong Kong China 
 HOKCF Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hong Kong China are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Hong Kong exhibited solid returns over the last few months and may actually be approaching a breakup point.

HOKCF Price Channel

CHINA GAS and Hong Kong Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with CHINA GAS and Hong Kong

The main advantage of trading using opposite CHINA GAS and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA GAS 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 CHINA GAS HOLDINGS and Hong Kong China 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

Other Complementary Tools

Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go