Correlation Between Zhong Yang and Hut 8

Can any of the company-specific risk be diversified away by investing in both Zhong Yang and Hut 8 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 Zhong Yang and Hut 8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zhong Yang Financial and Hut 8 Corp, you can compare the effects of market volatilities on Zhong Yang and Hut 8 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 Zhong Yang with a short position of Hut 8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhong Yang and Hut 8.

Diversification Opportunities for Zhong Yang and Hut 8

-0.74

Correlation Coefficient

Zhong Yang  Hut 8

Pay attention - limited upside

The 3 months correlation between Zhong and Hut is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zhong Yang Financial and Hut 8 Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hut 8 Corp and Zhong Yang 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 Zhong Yang Financial are associated (or correlated) with Hut 8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hut 8 Corp has no effect on the direction of Zhong Yang i.e., Zhong Yang and Hut 8 go up and down completely randomly.

Pair Corralation between Zhong Yang and Hut 8

Considering the 90-day investment horizon Zhong Yang Financial is expected to under-perform the Hut 8. But the stock apears to be less risky and, when comparing its historical volatility, Zhong Yang Financial is 2.18 times less risky than Hut 8. The stock trades about -0.05 of its potential returns per unit of risk. The Hut 8 Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,674  in Hut 8 Corp on October 6, 2024 and sell it today you would earn a total of  742.00  from holding Hut 8 Corp or generate 44.32% return on investment over 90 days.

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

Zhong Yang Financial  vs.  Hut 8 Corp

Zhong Yang Financial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hut 8 Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hut 8 Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Hut 8 unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zhong Yang and Hut 8

The main advantage of trading using opposite Zhong Yang and Hut 8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhong Yang position performs unexpectedly, Hut 8 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 Hut 8 will offset losses from the drop in Hut 8's long position.

The idea behind Zhong Yang Financial and Hut 8 Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.