Correlation Between Kidswant Children and Holitech Technology

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

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

Diversification Opportunities for Kidswant Children and Holitech Technology

0.61

Correlation Coefficient

Kidswant Children  Holitech Technology

Poor diversification

The 3 months correlation between Kidswant and Holitech is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kidswant Children Products and Holitech Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holitech Technology and Kidswant Children 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 Kidswant Children Products are associated (or correlated) with Holitech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holitech Technology has no effect on the direction of Kidswant Children i.e., Kidswant Children and Holitech Technology go up and down completely randomly.

Pair Corralation between Kidswant Children and Holitech Technology

Assuming the 90 days trading horizon Kidswant Children Products is expected to under-perform the Holitech Technology. In addition to that, Kidswant Children is 1.17 times more volatile than Holitech Technology Co. It trades about -0.23 of its total potential returns per unit of risk. Holitech Technology Co is currently generating about -0.18 per unit of volatility. If you would invest  232.00  in Holitech Technology Co on October 9, 2024 and sell it today you would lose (30.00) from holding Holitech Technology Co or give up 12.93% of portfolio value over 90 days.

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

Kidswant Children Products  vs.  Holitech Technology Co

Kidswant Children

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kidswant Children Products are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kidswant Children may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Holitech Technology

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Holitech Technology Co are ranked lower than 17 (%) 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.

Pair Trading with Kidswant Children and Holitech Technology

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

The idea behind Kidswant Children Products and Holitech Technology Co 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.