Correlation Between Snam Rete and Hong Kong

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

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

Diversification Opportunities for Snam Rete and Hong Kong

-0.11
  Correlation Coefficient
Snam Rete Gas
Hong Kong China

Good diversification

The 3 months correlation between SNMRY and HOKCF is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Snam Rete Gas 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 Snam Rete 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 Snam Rete Gas 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 Snam Rete i.e., Snam Rete and Hong Kong go up and down completely randomly.

Pair Corralation between Snam Rete and Hong Kong

Assuming the 90 days horizon Snam Rete is expected to generate 20.98 times less return on investment than Hong Kong. But when comparing it to its historical volatility, Snam Rete Gas is 15.4 times less risky than Hong Kong. It trades about 0.03 of its potential returns per unit of risk. Hong Kong China is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  191.00  in Hong Kong China on May 1, 2021 and sell it today you would lose (31.00)  from holding Hong Kong China or give up 16.23% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.4%
ValuesDaily Returns

Snam Rete Gas  vs.  Hong Kong China

 Performance (%) 
      Timeline 
Snam Rete Gas 
 SNMRY Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Snam Rete Gas are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Snam Rete may actually be approaching a critical reversion point that can send shares even higher in August 2021.

SNMRY Price Channel

Hong Kong China 
 HOKCF Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hong Kong China are ranked lower than 8 (%) 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

Snam Rete and Hong Kong Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Snam Rete and Hong Kong

The main advantage of trading using opposite Snam Rete and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snam Rete 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 Snam Rete Gas 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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