Correlation Between Harvest Fund and ACM Research

Can any of the company-specific risk be diversified away by investing in both Harvest Fund and ACM Research 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 ACM Research 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 ACM Research Shanghai, you can compare the effects of market volatilities on Harvest Fund and ACM Research 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 ACM Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Fund and ACM Research.

Diversification Opportunities for Harvest Fund and ACM Research

-0.76

Correlation Coefficient

Harvest Fund  ACM Research

Pay attention - limited upside

The 3 months correlation between Harvest and ACM is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Fund Management and ACM Research Shanghai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACM Research Shanghai 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 ACM Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACM Research Shanghai has no effect on the direction of Harvest Fund i.e., Harvest Fund and ACM Research go up and down completely randomly.

Pair Corralation between Harvest Fund and ACM Research

Assuming the 90 days trading horizon Harvest Fund is expected to generate 1.7 times less return on investment than ACM Research. But when comparing it to its historical volatility, Harvest Fund Management is 2.2 times less risky than ACM Research. It trades about 0.01 of its potential returns per unit of risk. ACM Research Shanghai is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  10,927  in ACM Research Shanghai on October 22, 2024 and sell it today you would lose (857.00) from holding ACM Research Shanghai or give up 7.84% of portfolio value over 90 days.

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

Harvest Fund Management  vs.  ACM Research Shanghai

Harvest Fund Management

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Fund Management are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Harvest Fund sustained solid returns over the last few months and may actually be approaching a breakup point.

ACM Research Shanghai

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACM Research Shanghai has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Harvest Fund and ACM Research

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

The idea behind Harvest Fund Management and ACM Research Shanghai 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.