Correlation Between Cloud Live and Ingenic Semiconductor

Can any of the company-specific risk be diversified away by investing in both Cloud Live and Ingenic Semiconductor 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 Cloud Live and Ingenic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cloud Live Technology and Ingenic Semiconductor, you can compare the effects of market volatilities on Cloud Live and Ingenic Semiconductor 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 Cloud Live with a short position of Ingenic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Live and Ingenic Semiconductor.

Diversification Opportunities for Cloud Live and Ingenic Semiconductor

-0.09

Correlation Coefficient

Cloud Live  Ingenic Semiconductor

Good diversification

The 3 months correlation between Cloud and Ingenic is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Live Technology and Ingenic Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingenic Semiconductor and Cloud Live 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 Cloud Live Technology are associated (or correlated) with Ingenic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingenic Semiconductor has no effect on the direction of Cloud Live i.e., Cloud Live and Ingenic Semiconductor go up and down completely randomly.

Pair Corralation between Cloud Live and Ingenic Semiconductor

Assuming the 90 days trading horizon Cloud Live Technology is expected to generate 1.3 times more return on investment than Ingenic Semiconductor. However, Cloud Live is 1.3 times more volatile than Ingenic Semiconductor. It trades about 0.08 of its potential returns per unit of risk. Ingenic Semiconductor is currently generating about 0.02 per unit of risk. If you would invest  304.00  in Cloud Live Technology on December 25, 2024 and sell it today you would earn a total of  53.00  from holding Cloud Live Technology or generate 17.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

Cloud Live Technology  vs.  Ingenic Semiconductor

Cloud Live Technology

Risk-Adjusted Performance

Modest

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

Ingenic Semiconductor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ingenic Semiconductor are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Ingenic Semiconductor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cloud Live and Ingenic Semiconductor

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

The idea behind Cloud Live Technology and Ingenic Semiconductor 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..