Correlation Between Hong Kong and Otc Markets
Can any of the company-specific risk be diversified away by investing in both Hong Kong and Otc Markets 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 Otc Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Exchange and Otc Markets Group, you can compare the effects of market volatilities on Hong Kong and Otc Markets 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 Otc Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Otc Markets.
Diversification Opportunities for Hong Kong and Otc Markets
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hong and Otc is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Exchange and Otc Markets Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otc Markets Group 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 Exchange are associated (or correlated) with Otc Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otc Markets Group has no effect on the direction of Hong Kong i.e., Hong Kong and Otc Markets go up and down completely randomly.
Pair Corralation between Hong Kong and Otc Markets
Assuming the 90 days horizon Hong Kong Exchange is expected to generate 1.43 times more return on investment than Otc Markets. However, Hong Kong is 1.43 times more volatile than Otc Markets Group. It trades about 0.0 of its potential returns per unit of risk. Otc Markets Group is currently generating about -0.11 per unit of risk. If you would invest 2,825 in Hong Kong Exchange on January 20, 2024 and sell it today you would lose (38.00) from holding Hong Kong Exchange or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Hong Kong Exchange vs. Otc Markets Group
Performance |
| Timeline |
| Hong Kong Exchange |
| Otc Markets Group |
Hong Kong and Otc Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Otc Markets
The main advantage of trading using opposite Hong Kong and Otc Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong position performs unexpectedly, Otc Markets 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 Otc Markets will offset losses from the drop in Otc Markets' long position.| Hong Kong vs. Hong Kong Exchanges | Hong Kong vs. MSCI Inc | Hong Kong vs. Otc Markets Group | Hong Kong vs. Dun Bradstreet Holdings |
| Otc Markets vs. Pfizer Inc | Otc Markets vs. Heartland Financial USA | Otc Markets vs. Conflux Network | Otc Markets vs. Citigroup Capital XIII |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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