Correlation Between ARHT Media and CooTek Cayman

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

By analyzing existing cross correlation between ARHT Media and CooTek Cayman, you can compare the effects of market volatilities on ARHT Media and CooTek Cayman 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 ARHT Media with a short position of CooTek Cayman. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARHT Media and CooTek Cayman.

Diversification Opportunities for ARHT Media and CooTek Cayman

0.34

Correlation Coefficient

ARHT Media  CooTek Cayman

Weak diversification

The 3 months correlation between ARHT and CooTek is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ARHT Media and CooTek Cayman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CooTek Cayman and ARHT Media 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 ARHT Media are associated (or correlated) with CooTek Cayman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CooTek Cayman has no effect on the direction of ARHT Media i.e., ARHT Media and CooTek Cayman go up and down completely randomly.

Pair Corralation between ARHT Media and CooTek Cayman

If you would invest  41.00  in CooTek Cayman on September 1, 2024 and sell it today you would earn a total of  0.00  from holding CooTek Cayman or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.79%
Values	Daily Returns

ARHT Media  vs.  CooTek Cayman

ARHT Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARHT Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

CooTek Cayman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CooTek Cayman has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, CooTek Cayman is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ARHT Media and CooTek Cayman

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

The idea behind ARHT Media and CooTek Cayman 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.