Correlation Between Cloudweb and New Generation
Can any of the company-specific risk be diversified away by investing in both Cloudweb and New Generation 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 Cloudweb and New Generation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloudweb and New Generation Consumer, you can compare the effects of market volatilities on Cloudweb and New Generation 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 Cloudweb with a short position of New Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloudweb and New Generation.
Diversification Opportunities for Cloudweb and New Generation
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cloudweb and New is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cloudweb and New Generation Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Generation Consumer and Cloudweb 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 Cloudweb are associated (or correlated) with New Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Generation Consumer has no effect on the direction of Cloudweb i.e., Cloudweb and New Generation go up and down completely randomly.
Pair Corralation between Cloudweb and New Generation
Given the investment horizon of 90 days Cloudweb is expected to generate 0.91 times more return on investment than New Generation. However, Cloudweb is 1.1 times less risky than New Generation. It trades about 0.09 of its potential returns per unit of risk. New Generation Consumer is currently generating about 0.01 per unit of risk. If you would invest 3.70 in Cloudweb on December 27, 2024 and sell it today you would earn a total of 0.50 from holding Cloudweb or generate 13.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cloudweb vs. New Generation Consumer
Performance |
Timeline |
Cloudweb |
New Generation Consumer |
Cloudweb and New Generation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cloudweb and New Generation
The main advantage of trading using opposite Cloudweb and New Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloudweb position performs unexpectedly, New Generation 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 New Generation will offset losses from the drop in New Generation's long position.Cloudweb vs. UHF Logistics Group | Cloudweb vs. Green Leaf Innovations | Cloudweb vs. Carefree Group | Cloudweb vs. Blockchain Industries |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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