Correlation Between 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.
By analyzing existing cross correlation between China Gas Holdings and Hong Kong And, 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.

Diversification Opportunities for China Gas and Hong Kong

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between China and Hong is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding China Gas Holdings and Hong Kong And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong And 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 And 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 Holdings is expected to generate 1.05 times more return on investment than Hong Kong. However, China Gas is 1.05 times more volatile than Hong Kong And. It trades about 0.1 of its potential returns per unit of risk. Hong Kong And is currently generating about 0.01 per unit of risk. If you would invest  2,208  in China Gas Holdings on December 29, 2023 and sell it today you would earn a total of  110.00  from holding China Gas Holdings or generate 4.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

China Gas Holdings  vs.  Hong Kong And

 Performance 
       Timeline  
China Gas Holdings 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
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 fairly strong essential indicators, China Gas is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Hong Kong And 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Hong Kong And are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Hong Kong may actually be approaching a critical reversion point that can send shares even higher in April 2024.

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 And 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 the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

Other Complementary Tools

Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios