Correlation Between Cloud Live and Zhongtong Guomai

Can any of the company-specific risk be diversified away by investing in both Cloud Live and Zhongtong Guomai 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 Zhongtong Guomai 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 Zhongtong Guomai Communication, you can compare the effects of market volatilities on Cloud Live and Zhongtong Guomai 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 Zhongtong Guomai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Live and Zhongtong Guomai.

Diversification Opportunities for Cloud Live and Zhongtong Guomai

0.5

Correlation Coefficient

Cloud Live  Zhongtong Guomai

Very weak diversification

The 3 months correlation between Cloud and Zhongtong is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Live Technology and Zhongtong Guomai Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtong Guomai Com 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 Zhongtong Guomai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtong Guomai Com has no effect on the direction of Cloud Live i.e., Cloud Live and Zhongtong Guomai go up and down completely randomly.

Pair Corralation between Cloud Live and Zhongtong Guomai

Assuming the 90 days trading horizon Cloud Live is expected to generate 2.12 times less return on investment than Zhongtong Guomai. In addition to that, Cloud Live is 1.79 times more volatile than Zhongtong Guomai Communication. It trades about 0.01 of its total potential returns per unit of risk. Zhongtong Guomai Communication is currently generating about 0.03 per unit of volatility. If you would invest  785.00  in Zhongtong Guomai Communication on December 26, 2024 and sell it today you would earn a total of  21.00  from holding Zhongtong Guomai Communication or generate 2.68% return on investment over 90 days.

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

Cloud Live Technology  vs.  Zhongtong Guomai Communication

Cloud Live Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cloud Live Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cloud Live is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Zhongtong Guomai Com

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zhongtong Guomai Communication are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Zhongtong Guomai 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 Zhongtong Guomai

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

The idea behind Cloud Live Technology and Zhongtong Guomai Communication 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.