Correlation Between Hour Loop and ATRenew

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

By analyzing existing cross correlation between Hour Loop and ATRenew Inc DRC, you can compare the effects of market volatilities on Hour Loop and ATRenew 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 Hour Loop with a short position of ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hour Loop and ATRenew.

Diversification Opportunities for Hour Loop and ATRenew

-0.29

Correlation Coefficient

Hour Loop  ATRenew

Very good diversification

The 3 months correlation between Hour and ATRenew is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hour Loop and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC and Hour Loop 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 Hour Loop are associated (or correlated) with ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Hour Loop i.e., Hour Loop and ATRenew go up and down completely randomly.

Pair Corralation between Hour Loop and ATRenew

Given the investment horizon of 90 days Hour Loop is expected to under-perform the ATRenew. In addition to that, Hour Loop is 1.52 times more volatile than ATRenew Inc DRC. It trades about -0.1 of its total potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.02 per unit of volatility. If you would invest  289.00  in ATRenew Inc DRC on December 28, 2024 and sell it today you would earn a total of  2.00  from holding ATRenew Inc DRC or generate 0.69% return on investment over 90 days.

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

Hour Loop  vs.  ATRenew Inc DRC

Hour Loop

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hour Loop has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

ATRenew Inc DRC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ATRenew Inc DRC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ATRenew may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hour Loop and ATRenew

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

The idea behind Hour Loop and ATRenew Inc DRC 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.