Correlation Between CBH and PUYI Old

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

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

Diversification Opportunities for CBH and PUYI Old

0.46

Correlation Coefficient

CBH  PUYI Old

Very weak diversification

The 3 months correlation between CBH and PUYI is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CBH and PUYI Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUYI Old and CBH 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 CBH are associated (or correlated) with PUYI Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUYI Old has no effect on the direction of CBH i.e., CBH and PUYI Old go up and down completely randomly.

Pair Corralation between CBH and PUYI Old

Considering the 90-day investment horizon CBH is expected to generate 6.0 times less return on investment than PUYI Old. But when comparing it to its historical volatility, CBH is 10.01 times less risky than PUYI Old. It trades about 0.04 of its potential returns per unit of risk. PUYI Old is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  626.00  in PUYI Old on October 24, 2024 and sell it today you would lose (6.00) from holding PUYI Old or give up 0.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	29.9%
Values	Daily Returns

CBH  vs.  PUYI Old

CBH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

PUYI Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PUYI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, PUYI Old is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with CBH and PUYI Old

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

The idea behind CBH and PUYI Old 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.