Correlation Between Hollywall Entertainment and Kuke Music
Can any of the company-specific risk be diversified away by investing in both Hollywall Entertainment and Kuke Music 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 Hollywall Entertainment and Kuke Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hollywall Entertainment and Kuke Music Holding, you can compare the effects of market volatilities on Hollywall Entertainment and Kuke Music 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 Hollywall Entertainment with a short position of Kuke Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywall Entertainment and Kuke Music.
Diversification Opportunities for Hollywall Entertainment and Kuke Music
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hollywall and Kuke is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hollywall Entertainment and Kuke Music Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuke Music Holding and Hollywall Entertainment 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 Hollywall Entertainment are associated (or correlated) with Kuke Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuke Music Holding has no effect on the direction of Hollywall Entertainment i.e., Hollywall Entertainment and Kuke Music go up and down completely randomly.
Pair Corralation between Hollywall Entertainment and Kuke Music
Given the investment horizon of 90 days Hollywall Entertainment is expected to under-perform the Kuke Music. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hollywall Entertainment is 1.08 times less risky than Kuke Music. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Kuke Music Holding is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Kuke Music Holding on December 2, 2024 and sell it today you would lose (8.00) from holding Kuke Music Holding or give up 22.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hollywall Entertainment vs. Kuke Music Holding
Performance |
Timeline |
Hollywall Entertainment |
Kuke Music Holding |
Hollywall Entertainment and Kuke Music Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hollywall Entertainment and Kuke Music
The main advantage of trading using opposite Hollywall Entertainment and Kuke Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywall Entertainment position performs unexpectedly, Kuke Music 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 Kuke Music will offset losses from the drop in Kuke Music's long position.The idea behind Hollywall Entertainment and Kuke Music Holding 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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Check out your portfolio center.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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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