Correlation Between Cayenne Entertainment and HOYA Resort

Can any of the company-specific risk be diversified away by investing in both Cayenne Entertainment and HOYA Resort 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 Cayenne Entertainment and HOYA Resort into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cayenne Entertainment Technology and HOYA Resort Hotel, you can compare the effects of market volatilities on Cayenne Entertainment and HOYA Resort 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 Cayenne Entertainment with a short position of HOYA Resort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cayenne Entertainment and HOYA Resort.

Diversification Opportunities for Cayenne Entertainment and HOYA Resort

-0.27

Correlation Coefficient

Cayenne Entertainment  HOYA Resort

Very good diversification

The 3 months correlation between Cayenne and HOYA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cayenne Entertainment Technolo and HOYA Resort Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOYA Resort Hotel and Cayenne Entertainment 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 Cayenne Entertainment Technology are associated (or correlated) with HOYA Resort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOYA Resort Hotel has no effect on the direction of Cayenne Entertainment i.e., Cayenne Entertainment and HOYA Resort go up and down completely randomly.

Pair Corralation between Cayenne Entertainment and HOYA Resort

Assuming the 90 days trading horizon Cayenne Entertainment Technology is expected to generate 40.44 times more return on investment than HOYA Resort. However, Cayenne Entertainment is 40.44 times more volatile than HOYA Resort Hotel. It trades about 0.08 of its potential returns per unit of risk. HOYA Resort Hotel is currently generating about 0.0 per unit of risk. If you would invest  5,915  in Cayenne Entertainment Technology on September 21, 2024 and sell it today you would lose (2,195) from holding Cayenne Entertainment Technology or give up 37.11% of portfolio value over 90 days.

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

Cayenne Entertainment Technolo  vs.  HOYA Resort Hotel

Cayenne Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cayenne Entertainment Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

HOYA Resort Hotel

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HOYA Resort Hotel are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, HOYA Resort showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cayenne Entertainment and HOYA Resort

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

The idea behind Cayenne Entertainment Technology and HOYA Resort Hotel 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.