Correlation Between Kuke Music and Huize Holding
Can any of the company-specific risk be diversified away by investing in both Kuke Music and Huize Holding 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 Kuke Music and Huize Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuke Music Holding and Huize Holding, you can compare the effects of market volatilities on Kuke Music and Huize Holding 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 Kuke Music with a short position of Huize Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuke Music and Huize Holding.
Diversification Opportunities for Kuke Music and Huize Holding
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kuke and Huize is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kuke Music Holding and Huize Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huize Holding and Kuke Music 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 Kuke Music Holding are associated (or correlated) with Huize Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huize Holding has no effect on the direction of Kuke Music i.e., Kuke Music and Huize Holding go up and down completely randomly.
Pair Corralation between Kuke Music and Huize Holding
Given the investment horizon of 90 days Kuke Music Holding is expected to generate 2.74 times more return on investment than Huize Holding. However, Kuke Music is 2.74 times more volatile than Huize Holding. It trades about 0.03 of its potential returns per unit of risk. Huize Holding is currently generating about -0.06 per unit of risk. If you would invest 350.00 in Kuke Music Holding on December 27, 2024 and sell it today you would lose (55.00) from holding Kuke Music Holding or give up 15.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kuke Music Holding vs. Huize Holding
Performance |
Timeline |
Kuke Music Holding |
Huize Holding |
Kuke Music and Huize Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kuke Music and Huize Holding
The main advantage of trading using opposite Kuke Music and Huize Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuke Music position performs unexpectedly, Huize Holding 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 Huize Holding will offset losses from the drop in Huize Holding's long position.Kuke Music vs. Cinemark Holdings | Kuke Music vs. News Corp B | Kuke Music vs. Marcus | Kuke Music vs. Liberty Media |
Huize Holding vs. CorVel Corp | Huize Holding vs. Erie Indemnity | Huize Holding vs. Crawford Company | Huize Holding vs. eHealth |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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