Correlation Between Holy Stone and Wholetech System

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Can any of the company-specific risk be diversified away by investing in both Holy Stone and Wholetech System 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 Holy Stone and Wholetech System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holy Stone Enterprise and Wholetech System Hitech, you can compare the effects of market volatilities on Holy Stone and Wholetech System 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 Holy Stone with a short position of Wholetech System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holy Stone and Wholetech System.

Diversification Opportunities for Holy Stone and Wholetech System

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Holy and Wholetech is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Holy Stone Enterprise and Wholetech System Hitech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wholetech System Hitech and Holy Stone 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 Holy Stone Enterprise are associated (or correlated) with Wholetech System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wholetech System Hitech has no effect on the direction of Holy Stone i.e., Holy Stone and Wholetech System go up and down completely randomly.

Pair Corralation between Holy Stone and Wholetech System

Assuming the 90 days trading horizon Holy Stone Enterprise is expected to under-perform the Wholetech System. But the stock apears to be less risky and, when comparing its historical volatility, Holy Stone Enterprise is 3.31 times less risky than Wholetech System. The stock trades about -0.14 of its potential returns per unit of risk. The Wholetech System Hitech is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  10,250  in Wholetech System Hitech on October 10, 2024 and sell it today you would earn a total of  1,450  from holding Wholetech System Hitech or generate 14.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Holy Stone Enterprise  vs.  Wholetech System Hitech

 Performance 
       Timeline  
Holy Stone Enterprise 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Holy Stone Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Holy Stone is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Wholetech System Hitech 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Wholetech System Hitech are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Wholetech System showed solid returns over the last few months and may actually be approaching a breakup point.

Holy Stone and Wholetech System Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Holy Stone and Wholetech System

The main advantage of trading using opposite Holy Stone and Wholetech System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holy Stone position performs unexpectedly, Wholetech System 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 Wholetech System will offset losses from the drop in Wholetech System's long position.
The idea behind Holy Stone Enterprise and Wholetech System Hitech 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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