Correlation Between Holitech Technology and Ye Chiu

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

Diversification Opportunities for Holitech Technology and Ye Chiu

0.69

Correlation Coefficient

Holitech Technology  Ye Chiu

Poor diversification

The 3 months correlation between Holitech and 601388 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Holitech Technology Co and Ye Chiu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ye Chiu Metal 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 Ye Chiu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ye Chiu Metal has no effect on the direction of Holitech Technology i.e., Holitech Technology and Ye Chiu go up and down completely randomly.

Pair Corralation between Holitech Technology and Ye Chiu

Assuming the 90 days trading horizon Holitech Technology is expected to generate 1.13 times less return on investment than Ye Chiu. In addition to that, Holitech Technology is 1.3 times more volatile than Ye Chiu Metal. It trades about 0.01 of its total potential returns per unit of risk. Ye Chiu Metal is currently generating about 0.01 per unit of volatility. If you would invest  268.00  in Ye Chiu Metal on September 27, 2024 and sell it today you would lose (12.00) from holding Ye Chiu Metal or give up 4.48% of portfolio value over 90 days.

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

Holitech Technology Co  vs.  Ye Chiu Metal

Holitech Technology

Risk-Adjusted Performance

26 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Holitech Technology Co are ranked lower than 26 (%) 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.

Ye Chiu Metal

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ye Chiu Metal are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ye Chiu may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Holitech Technology and Ye Chiu

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

The idea behind Holitech Technology Co and Ye Chiu Metal 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 the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.