Correlation Between BrightView Holdings and Kingsoft Cloud

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

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

Diversification Opportunities for BrightView Holdings and Kingsoft Cloud

-0.77

Correlation Coefficient

BrightView Holdings  Kingsoft Cloud

Pay attention - limited upside

The 3 months correlation between BrightView and Kingsoft is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding BrightView Holdings and Kingsoft Cloud Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsoft Cloud Holdings and BrightView Holdings 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 BrightView Holdings are associated (or correlated) with Kingsoft Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsoft Cloud Holdings has no effect on the direction of BrightView Holdings i.e., BrightView Holdings and Kingsoft Cloud go up and down completely randomly.

Pair Corralation between BrightView Holdings and Kingsoft Cloud

Allowing for the 90-day total investment horizon BrightView Holdings is expected to under-perform the Kingsoft Cloud. But the stock apears to be less risky and, when comparing its historical volatility, BrightView Holdings is 3.36 times less risky than Kingsoft Cloud. The stock trades about -0.16 of its potential returns per unit of risk. The Kingsoft Cloud Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,020  in Kingsoft Cloud Holdings on December 26, 2024 and sell it today you would earn a total of  533.00  from holding Kingsoft Cloud Holdings or generate 52.25% return on investment over 90 days.

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

BrightView Holdings  vs.  Kingsoft Cloud Holdings

BrightView Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days BrightView Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Kingsoft Cloud Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsoft Cloud Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Kingsoft Cloud exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BrightView Holdings and Kingsoft Cloud

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

The idea behind BrightView Holdings and Kingsoft Cloud Holdings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.