Correlation Between Holitech Technology and Hainan HNA

Can any of the company-specific risk be diversified away by investing in both Holitech Technology and Hainan HNA 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 Holitech Technology and Hainan HNA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Holitech Technology Co and Hainan HNA Infrastructure, you can compare the effects of market volatilities on Holitech Technology and Hainan HNA 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 Holitech Technology with a short position of Hainan HNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holitech Technology and Hainan HNA.

Diversification Opportunities for Holitech Technology and Hainan HNA

0.84

Correlation Coefficient

Holitech Technology  Hainan HNA

Very poor diversification

The 3 months correlation between Holitech and Hainan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Holitech Technology Co and Hainan HNA Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan HNA Infrastructure and Holitech Technology 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 Holitech Technology Co are associated (or correlated) with Hainan HNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan HNA Infrastructure has no effect on the direction of Holitech Technology i.e., Holitech Technology and Hainan HNA go up and down completely randomly.

Pair Corralation between Holitech Technology and Hainan HNA

Assuming the 90 days trading horizon Holitech Technology Co is expected to under-perform the Hainan HNA. In addition to that, Holitech Technology is 1.23 times more volatile than Hainan HNA Infrastructure. It trades about -0.03 of its total potential returns per unit of risk. Hainan HNA Infrastructure is currently generating about 0.04 per unit of volatility. If you would invest  384.00  in Hainan HNA Infrastructure on September 22, 2024 and sell it today you would earn a total of  7.00  from holding Hainan HNA Infrastructure or generate 1.82% return on investment over 90 days.

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

Holitech Technology Co  vs.  Hainan HNA Infrastructure

Holitech Technology

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Holitech Technology Co are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Holitech Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Hainan HNA Infrastructure

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hainan HNA Infrastructure are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hainan HNA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Holitech Technology and Hainan HNA

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

The idea behind Holitech Technology Co and Hainan HNA Infrastructure 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 CEOs Directory module to screen CEOs from public companies around the world.