Correlation Between ECloudvalley Digital and Buima

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

By analyzing existing cross correlation between eCloudvalley Digital Technology and Buima Group, you can compare the effects of market volatilities on ECloudvalley Digital and Buima 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 ECloudvalley Digital with a short position of Buima. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECloudvalley Digital and Buima.

Diversification Opportunities for ECloudvalley Digital and Buima

-0.66

Correlation Coefficient

ECloudvalley Digital  Buima

Excellent diversification

The 3 months correlation between ECloudvalley and Buima is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding eCloudvalley Digital Technolog and Buima Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buima Group and ECloudvalley Digital 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 eCloudvalley Digital Technology are associated (or correlated) with Buima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buima Group has no effect on the direction of ECloudvalley Digital i.e., ECloudvalley Digital and Buima go up and down completely randomly.

Pair Corralation between ECloudvalley Digital and Buima

Assuming the 90 days trading horizon eCloudvalley Digital Technology is expected to generate 0.82 times more return on investment than Buima. However, eCloudvalley Digital Technology is 1.22 times less risky than Buima. It trades about 0.09 of its potential returns per unit of risk. Buima Group is currently generating about 0.03 per unit of risk. If you would invest  9,580  in eCloudvalley Digital Technology on October 23, 2024 and sell it today you would earn a total of  1,570  from holding eCloudvalley Digital Technology or generate 16.39% return on investment over 90 days.

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

eCloudvalley Digital Technolog  vs.  Buima Group

eCloudvalley Digital

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in eCloudvalley Digital Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, ECloudvalley Digital showed solid returns over the last few months and may actually be approaching a breakup point.

Buima Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Buima Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Buima may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ECloudvalley Digital and Buima

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

The idea behind eCloudvalley Digital Technology and Buima 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..