Correlation Between WhiteHorse Finance and Puyi

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

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

Diversification Opportunities for WhiteHorse Finance and Puyi

-0.68

Correlation Coefficient

WhiteHorse Finance  Puyi

Excellent diversification

The 3 months correlation between WhiteHorse and Puyi is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding WhiteHorse Finance and Puyi Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puyi Inc ADR and WhiteHorse Finance 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 WhiteHorse Finance are associated (or correlated) with Puyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puyi Inc ADR has no effect on the direction of WhiteHorse Finance i.e., WhiteHorse Finance and Puyi go up and down completely randomly.

Pair Corralation between WhiteHorse Finance and Puyi

Considering the 90-day investment horizon WhiteHorse Finance is expected to generate 1.43 times less return on investment than Puyi. But when comparing it to its historical volatility, WhiteHorse Finance is 3.95 times less risky than Puyi. It trades about 0.01 of its potential returns per unit of risk. Puyi Inc ADR is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  732.00  in Puyi Inc ADR on September 1, 2024 and sell it today you would lose (112.00) from holding Puyi Inc ADR or give up 15.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	31.11%
Values	Daily Returns

WhiteHorse Finance  vs.  Puyi Inc ADR

WhiteHorse Finance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WhiteHorse Finance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, WhiteHorse Finance is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Puyi Inc ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Puyi Inc ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Puyi is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with WhiteHorse Finance and Puyi

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

The idea behind WhiteHorse Finance and Puyi Inc ADR 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.