Correlation Between Conifer Holdings, and Hongli Group

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

By analyzing existing cross correlation between Conifer Holdings, 975 and Hongli Group Ordinary, you can compare the effects of market volatilities on Conifer Holdings, and Hongli Group 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 Conifer Holdings, with a short position of Hongli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conifer Holdings, and Hongli Group.

Diversification Opportunities for Conifer Holdings, and Hongli Group

-0.11

Correlation Coefficient

Conifer Holdings,  Hongli Group

Good diversification

The 3 months correlation between Conifer and Hongli is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Conifer Holdings, 975 and Hongli Group Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongli Group Ordinary and Conifer 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 Conifer Holdings, 975 are associated (or correlated) with Hongli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongli Group Ordinary has no effect on the direction of Conifer Holdings, i.e., Conifer Holdings, and Hongli Group go up and down completely randomly.

Pair Corralation between Conifer Holdings, and Hongli Group

Assuming the 90 days horizon Conifer Holdings, 975 is expected to generate 1.33 times more return on investment than Hongli Group. However, Conifer Holdings, is 1.33 times more volatile than Hongli Group Ordinary. It trades about 0.08 of its potential returns per unit of risk. Hongli Group Ordinary is currently generating about 0.01 per unit of risk. If you would invest  991.00  in Conifer Holdings, 975 on October 11, 2024 and sell it today you would earn a total of  1,309  from holding Conifer Holdings, 975 or generate 132.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.32%
Values	Daily Returns

Conifer Holdings, 975  vs.  Hongli Group Ordinary

Conifer Holdings, 975

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Conifer Holdings, 975 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Conifer Holdings, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Hongli Group Ordinary

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hongli Group Ordinary are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable essential indicators, Hongli Group is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Conifer Holdings, and Hongli Group

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

The idea behind Conifer Holdings, 975 and Hongli Group Ordinary 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.