Correlation Between BASE and Hitek Global
Can any of the company-specific risk be diversified away by investing in both BASE and Hitek Global 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 BASE and Hitek Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASE Inc and Hitek Global Ordinary, you can compare the effects of market volatilities on BASE and Hitek Global 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 BASE with a short position of Hitek Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASE and Hitek Global.
Diversification Opportunities for BASE and Hitek Global
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between BASE and Hitek is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding BASE Inc and Hitek Global Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitek Global Ordinary and BASE 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 BASE Inc are associated (or correlated) with Hitek Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitek Global Ordinary has no effect on the direction of BASE i.e., BASE and Hitek Global go up and down completely randomly.
Pair Corralation between BASE and Hitek Global
Assuming the 90 days horizon BASE Inc is expected to generate 2.21 times more return on investment than Hitek Global. However, BASE is 2.21 times more volatile than Hitek Global Ordinary. It trades about 0.22 of its potential returns per unit of risk. Hitek Global Ordinary is currently generating about -0.14 per unit of risk. If you would invest 150.00 in BASE Inc on September 25, 2024 and sell it today you would earn a total of 43.00 from holding BASE Inc or generate 28.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BASE Inc vs. Hitek Global Ordinary
Performance |
Timeline |
BASE Inc |
Hitek Global Ordinary |
BASE and Hitek Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BASE and Hitek Global
The main advantage of trading using opposite BASE and Hitek Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASE position performs unexpectedly, Hitek Global 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 Hitek Global will offset losses from the drop in Hitek Global's long position.BASE vs. CurrentC Power | BASE vs. Agent Information Software | BASE vs. Auddia Inc | BASE vs. Maxwell Resource |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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