Correlation Between 5I5j Holding and Beken Corp

Can any of the company-specific risk be diversified away by investing in both 5I5j Holding and Beken Corp 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 5I5j Holding and Beken Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 5I5j Holding Group and Beken Corp, you can compare the effects of market volatilities on 5I5j Holding and Beken Corp 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 5I5j Holding with a short position of Beken Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of 5I5j Holding and Beken Corp.

Diversification Opportunities for 5I5j Holding and Beken Corp

0.49

Correlation Coefficient

5I5j Holding  Beken Corp

Very weak diversification

The 3 months correlation between 5I5j and Beken is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding 5I5j Holding Group and Beken Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beken Corp and 5I5j Holding 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 5I5j Holding Group are associated (or correlated) with Beken Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beken Corp has no effect on the direction of 5I5j Holding i.e., 5I5j Holding and Beken Corp go up and down completely randomly.

Pair Corralation between 5I5j Holding and Beken Corp

Assuming the 90 days trading horizon 5I5j Holding Group is expected to under-perform the Beken Corp. In addition to that, 5I5j Holding is 1.05 times more volatile than Beken Corp. It trades about -0.06 of its total potential returns per unit of risk. Beken Corp is currently generating about 0.08 per unit of volatility. If you would invest  2,564  in Beken Corp on October 1, 2024 and sell it today you would earn a total of  423.00  from holding Beken Corp or generate 16.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

5I5j Holding Group  vs.  Beken Corp

5I5j Holding Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 5I5j Holding Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Beken Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Beken Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beken Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 5I5j Holding and Beken Corp

The main advantage of trading using opposite 5I5j Holding and Beken Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 5I5j Holding position performs unexpectedly, Beken Corp 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 Beken Corp will offset losses from the drop in Beken Corp's long position.

The idea behind 5I5j Holding Group and Beken Corp 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.