Correlation Between Addentax Group and Hub

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

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

Diversification Opportunities for Addentax Group and Hub

-0.51

Correlation Coefficient

Addentax Group  Hub

Excellent diversification

The 3 months correlation between Addentax and Hub is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Addentax Group Corp and Hub Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub Group and Addentax Group 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 Addentax Group Corp are associated (or correlated) with Hub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub Group has no effect on the direction of Addentax Group i.e., Addentax Group and Hub go up and down completely randomly.

Pair Corralation between Addentax Group and Hub

Given the investment horizon of 90 days Addentax Group Corp is expected to generate 3.03 times more return on investment than Hub. However, Addentax Group is 3.03 times more volatile than Hub Group. It trades about 0.04 of its potential returns per unit of risk. Hub Group is currently generating about 0.1 per unit of risk. If you would invest  57.00  in Addentax Group Corp on September 13, 2024 and sell it today you would earn a total of  3.00  from holding Addentax Group Corp or generate 5.26% return on investment over 90 days.

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

Addentax Group Corp  vs.  Hub Group

Addentax Group Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Addentax Group Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Addentax Group reported solid returns over the last few months and may actually be approaching a breakup point.

Hub Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hub Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, Hub may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Addentax Group and Hub

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

The idea behind Addentax Group Corp and Hub 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.