Correlation Between Harvest Fund and Haima Automobile

Can any of the company-specific risk be diversified away by investing in both Harvest Fund and Haima Automobile 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 Harvest Fund and Haima Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harvest Fund Management and Haima Automobile Group, you can compare the effects of market volatilities on Harvest Fund and Haima Automobile 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 Harvest Fund with a short position of Haima Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Fund and Haima Automobile.

Diversification Opportunities for Harvest Fund and Haima Automobile

-0.64

Correlation Coefficient

Harvest Fund  Haima Automobile

Excellent diversification

The 3 months correlation between Harvest and Haima is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Fund Management and Haima Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haima Automobile and Harvest Fund 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 Harvest Fund Management are associated (or correlated) with Haima Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haima Automobile has no effect on the direction of Harvest Fund i.e., Harvest Fund and Haima Automobile go up and down completely randomly.

Pair Corralation between Harvest Fund and Haima Automobile

Assuming the 90 days trading horizon Harvest Fund Management is expected to under-perform the Haima Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Harvest Fund Management is 8.03 times less risky than Haima Automobile. The stock trades about -0.06 of its potential returns per unit of risk. The Haima Automobile Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  306.00  in Haima Automobile Group on September 3, 2024 and sell it today you would earn a total of  144.00  from holding Haima Automobile Group or generate 47.06% return on investment over 90 days.

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

Harvest Fund Management  vs.  Haima Automobile Group

Harvest Fund Management

Risk-Adjusted Performance

0 of 100

Very Weak

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

Haima Automobile

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Haima Automobile Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Haima Automobile sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harvest Fund and Haima Automobile

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

The idea behind Harvest Fund Management and Haima Automobile Group 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.