Correlation Between Hub Cyber and Taoping

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

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

Diversification Opportunities for Hub Cyber and Taoping

0.18

Correlation Coefficient

Hub Cyber  Taoping

Average diversification

The 3 months correlation between Hub and Taoping is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hub Cyber Security and Taoping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taoping and Hub Cyber 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 Hub Cyber Security are associated (or correlated) with Taoping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taoping has no effect on the direction of Hub Cyber i.e., Hub Cyber and Taoping go up and down completely randomly.

Pair Corralation between Hub Cyber and Taoping

Assuming the 90 days horizon Hub Cyber Security is expected to under-perform the Taoping. In addition to that, Hub Cyber is 3.97 times more volatile than Taoping. It trades about -0.06 of its total potential returns per unit of risk. Taoping is currently generating about -0.15 per unit of volatility. If you would invest  42.00  in Taoping on December 28, 2024 and sell it today you would lose (16.00) from holding Taoping or give up 38.1% of portfolio value over 90 days.

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

Hub Cyber Security  vs.  Taoping

Hub Cyber Security

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hub Cyber Security has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Taoping

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taoping has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak 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.

Pair Trading with Hub Cyber and Taoping

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

The idea behind Hub Cyber Security and Taoping 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.