Correlation Between Holitech Technology and China Marine

Can any of the company-specific risk be diversified away by investing in both Holitech Technology and China Marine 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 China Marine 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 China Marine Information, you can compare the effects of market volatilities on Holitech Technology and China Marine 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 China Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holitech Technology and China Marine.

Diversification Opportunities for Holitech Technology and China Marine

-0.04

Correlation Coefficient

Holitech Technology  China Marine

Good diversification

The 3 months correlation between Holitech and China is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Holitech Technology Co and China Marine Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Marine Information 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 China Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Marine Information has no effect on the direction of Holitech Technology i.e., Holitech Technology and China Marine go up and down completely randomly.

Pair Corralation between Holitech Technology and China Marine

Assuming the 90 days trading horizon Holitech Technology Co is expected to under-perform the China Marine. But the stock apears to be less risky and, when comparing its historical volatility, Holitech Technology Co is 1.15 times less risky than China Marine. The stock trades about -0.12 of its potential returns per unit of risk. The China Marine Information is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  2,668  in China Marine Information on October 16, 2024 and sell it today you would lose (125.00) from holding China Marine Information or give up 4.69% of portfolio value over 90 days.

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

Holitech Technology Co  vs.  China Marine Information

Holitech Technology

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Holitech Technology Co are ranked lower than 16 (%) 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.

China Marine Information

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in China Marine Information are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, China Marine is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Holitech Technology and China Marine

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

The idea behind Holitech Technology Co and China Marine Information 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.