Correlation Between CorVel Corp and Huize Holding

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

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

Diversification Opportunities for CorVel Corp and Huize Holding

-0.19

Correlation Coefficient

CorVel Corp  Huize Holding

Good diversification

The 3 months correlation between CorVel and Huize is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding CorVel Corp and Huize Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huize Holding and CorVel Corp 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 CorVel Corp are associated (or correlated) with Huize Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huize Holding has no effect on the direction of CorVel Corp i.e., CorVel Corp and Huize Holding go up and down completely randomly.

Pair Corralation between CorVel Corp and Huize Holding

Given the investment horizon of 90 days CorVel Corp is expected to generate 0.55 times more return on investment than Huize Holding. However, CorVel Corp is 1.83 times less risky than Huize Holding. It trades about 0.0 of its potential returns per unit of risk. Huize Holding is currently generating about -0.05 per unit of risk. If you would invest  11,226  in CorVel Corp on December 28, 2024 and sell it today you would lose (116.00) from holding CorVel Corp or give up 1.03% of portfolio value over 90 days.

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

CorVel Corp  vs.  Huize Holding

CorVel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CorVel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, CorVel Corp is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Huize Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Huize Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with CorVel Corp and Huize Holding

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

The idea behind CorVel Corp and Huize Holding 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.