Correlation Between Hwabao WP and Holitech Technology

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

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

Diversification Opportunities for Hwabao WP and Holitech Technology

0.0

Correlation Coefficient

Hwabao WP  Holitech Technology

Pay attention - limited upside

The 3 months correlation between Hwabao and Holitech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hwabao WP CSI and Holitech Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holitech Technology and Hwabao WP 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 Hwabao WP CSI 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 Hwabao WP i.e., Hwabao WP and Holitech Technology go up and down completely randomly.

Pair Corralation between Hwabao WP and Holitech Technology

If you would invest  212.00  in Holitech Technology Co on October 7, 2024 and sell it today you would earn a total of  4.00  from holding Holitech Technology Co or generate 1.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.33%
Values	Daily Returns

Hwabao WP CSI  vs.  Holitech Technology Co

Hwabao WP CSI

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 Hwabao WP and Holitech Technology

The main advantage of trading using opposite Hwabao WP and Holitech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwabao WP 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 Hwabao WP CSI 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.