Correlation Between Envestnet and Hitek Global

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

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

Diversification Opportunities for Envestnet and Hitek Global

-0.4

Correlation Coefficient

Envestnet  Hitek Global

Very good diversification

The 3 months correlation between Envestnet and Hitek is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Envestnet and Hitek Global Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitek Global Ordinary and Envestnet 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 Envestnet are associated (or correlated) with Hitek Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitek Global Ordinary has no effect on the direction of Envestnet i.e., Envestnet and Hitek Global go up and down completely randomly.

Pair Corralation between Envestnet and Hitek Global

Considering the 90-day investment horizon Envestnet is expected to generate 0.05 times more return on investment than Hitek Global. However, Envestnet is 21.93 times less risky than Hitek Global. It trades about 0.4 of its potential returns per unit of risk. Hitek Global Ordinary is currently generating about -0.16 per unit of risk. If you would invest  6,279  in Envestnet on September 5, 2024 and sell it today you would earn a total of  35.00  from holding Envestnet or generate 0.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	76.19%
Values	Daily Returns

Envestnet  vs.  Hitek Global Ordinary

Envestnet

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Envestnet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Envestnet is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Hitek Global Ordinary

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hitek Global Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Envestnet and Hitek Global

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

The idea behind Envestnet and Hitek Global 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.