Correlation Between CEO Group and Hai An

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

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

Diversification Opportunities for CEO Group and Hai An

-0.79

Correlation Coefficient

CEO Group  Hai An

Pay attention - limited upside

The 3 months correlation between CEO and Hai is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding CEO Group JSC and Hai An Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hai An Transport and CEO 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 CEO Group JSC are associated (or correlated) with Hai An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hai An Transport has no effect on the direction of CEO Group i.e., CEO Group and Hai An go up and down completely randomly.

Pair Corralation between CEO Group and Hai An

Assuming the 90 days trading horizon CEO Group JSC is expected to under-perform the Hai An. In addition to that, CEO Group is 1.07 times more volatile than Hai An Transport. It trades about -0.06 of its total potential returns per unit of risk. Hai An Transport is currently generating about 0.0 per unit of volatility. If you would invest  5,020,000  in Hai An Transport on September 15, 2024 and sell it today you would lose (80,000) from holding Hai An Transport or give up 1.59% of portfolio value over 90 days.

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

CEO Group JSC  vs.  Hai An Transport

CEO Group JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEO Group JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, CEO Group is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Hai An Transport

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hai An Transport are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Hai An displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CEO Group and Hai An

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

The idea behind CEO Group JSC and Hai An Transport 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.