Correlation Between Freshworks and Hitek Global

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

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

Diversification Opportunities for Freshworks and Hitek Global

-0.08

Correlation Coefficient

Freshworks  Hitek Global

Good diversification

The 3 months correlation between Freshworks and Hitek is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Freshworks 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 Freshworks 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 Freshworks 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 Freshworks i.e., Freshworks and Hitek Global go up and down completely randomly.

Pair Corralation between Freshworks and Hitek Global

Given the investment horizon of 90 days Freshworks is expected to generate 0.6 times more return on investment than Hitek Global. However, Freshworks is 1.67 times less risky than Hitek Global. It trades about 0.11 of its potential returns per unit of risk. Hitek Global Ordinary is currently generating about 0.02 per unit of risk. If you would invest  1,645  in Freshworks on October 26, 2024 and sell it today you would earn a total of  159.00  from holding Freshworks or generate 9.67% return on investment over 90 days.

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

Freshworks  vs.  Hitek Global Ordinary

Freshworks

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Freshworks are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Freshworks demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Hitek Global Ordinary

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hitek Global Ordinary are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Hitek Global is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Freshworks and Hitek Global

The main advantage of trading using opposite Freshworks and Hitek Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freshworks 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 Freshworks 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.