Correlation Between Amlogic Shanghai Co and Cloud Live

Can any of the company-specific risk be diversified away by investing in both Amlogic Shanghai Co and Cloud Live 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 Amlogic Shanghai Co and Cloud Live into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Amlogic Shanghai Co and Cloud Live

-0.4

Correlation Coefficient

Amlogic Shanghai Co  Cloud Live

Very good diversification

The 3 months correlation between Amlogic and Cloud is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Amlogic Shanghai Co and Cloud Live Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Live Technology and Amlogic Shanghai Co 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 Amlogic Shanghai Co are associated (or correlated) with Cloud Live. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Live Technology has no effect on the direction of Amlogic Shanghai Co i.e., Amlogic Shanghai Co and Cloud Live go up and down completely randomly.

Pair Corralation between Amlogic Shanghai Co and Cloud Live

Assuming the 90 days trading horizon Amlogic Shanghai Co is expected to generate 1.66 times less return on investment than Cloud Live. But when comparing it to its historical volatility, Amlogic Shanghai Co is 1.57 times less risky than Cloud Live. It trades about 0.07 of its potential returns per unit of risk. Cloud Live Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  304.00  in Cloud Live Technology on December 25, 2024 and sell it today you would earn a total of  53.00  from holding Cloud Live Technology or generate 17.43% return on investment over 90 days.

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

Amlogic Shanghai Co  vs.  Cloud Live Technology

Amlogic Shanghai Co

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amlogic Shanghai Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amlogic Shanghai Co sustained solid returns over the last few months and may actually be approaching a breakup point.

Cloud Live Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cloud Live Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cloud Live sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amlogic Shanghai Co and Cloud Live

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

The idea behind Amlogic Shanghai Co and Cloud Live Technology 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.