Correlation Between Haoxi Health and Steel Connect

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

By analyzing existing cross correlation between Haoxi Health Technology and Steel Connect, you can compare the effects of market volatilities on Haoxi Health and Steel Connect 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 Haoxi Health with a short position of Steel Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haoxi Health and Steel Connect.

Diversification Opportunities for Haoxi Health and Steel Connect

-0.67

Correlation Coefficient

Haoxi Health  Steel Connect

Excellent diversification

The 3 months correlation between Haoxi and Steel is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Haoxi Health Technology and Steel Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Connect and Haoxi Health 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 Haoxi Health Technology are associated (or correlated) with Steel Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Connect has no effect on the direction of Haoxi Health i.e., Haoxi Health and Steel Connect go up and down completely randomly.

Pair Corralation between Haoxi Health and Steel Connect

Considering the 90-day investment horizon Haoxi Health Technology is expected to generate 10.48 times more return on investment than Steel Connect. However, Haoxi Health is 10.48 times more volatile than Steel Connect. It trades about 0.15 of its potential returns per unit of risk. Steel Connect is currently generating about 0.04 per unit of risk. If you would invest  15.00  in Haoxi Health Technology on October 9, 2024 and sell it today you would earn a total of  3.00  from holding Haoxi Health Technology or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Haoxi Health Technology  vs.  Steel Connect

Haoxi Health Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Haoxi Health Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Haoxi Health displayed solid returns over the last few months and may actually be approaching a breakup point.

Steel Connect

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Steel Connect are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Steel Connect displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Haoxi Health and Steel Connect

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

The idea behind Haoxi Health Technology and Steel Connect 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.