Correlation Between Hunan TV and Tangel Publishing

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Can any of the company-specific risk be diversified away by investing in both Hunan TV and Tangel Publishing 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 Hunan TV and Tangel Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hunan TV Broadcast and Tangel Publishing, you can compare the effects of market volatilities on Hunan TV and Tangel Publishing 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 Hunan TV with a short position of Tangel Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan TV and Tangel Publishing.

Diversification Opportunities for Hunan TV and Tangel Publishing

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Hunan and Tangel is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hunan TV Broadcast and Tangel Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangel Publishing and Hunan TV 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 Hunan TV Broadcast are associated (or correlated) with Tangel Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangel Publishing has no effect on the direction of Hunan TV i.e., Hunan TV and Tangel Publishing go up and down completely randomly.

Pair Corralation between Hunan TV and Tangel Publishing

Assuming the 90 days trading horizon Hunan TV Broadcast is expected to generate 0.84 times more return on investment than Tangel Publishing. However, Hunan TV Broadcast is 1.19 times less risky than Tangel Publishing. It trades about 0.13 of its potential returns per unit of risk. Tangel Publishing is currently generating about 0.11 per unit of risk. If you would invest  471.00  in Hunan TV Broadcast on October 18, 2024 and sell it today you would earn a total of  221.00  from holding Hunan TV Broadcast or generate 46.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Hunan TV Broadcast  vs.  Tangel Publishing

 Performance 
       Timeline  
Hunan TV Broadcast 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Hunan TV Broadcast are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hunan TV sustained solid returns over the last few months and may actually be approaching a breakup point.
Tangel Publishing 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Tangel Publishing are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tangel Publishing may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Hunan TV and Tangel Publishing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hunan TV and Tangel Publishing

The main advantage of trading using opposite Hunan TV and Tangel Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan TV position performs unexpectedly, Tangel Publishing 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 Tangel Publishing will offset losses from the drop in Tangel Publishing's long position.
The idea behind Hunan TV Broadcast and Tangel Publishing 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.
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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