Correlation Between Holitech Technology and Eastern Communications
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By analyzing existing cross correlation between Holitech Technology Co and Eastern Communications Co, you can compare the effects of market volatilities on Holitech Technology and Eastern Communications 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 Holitech Technology with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holitech Technology and Eastern Communications.
Diversification Opportunities for Holitech Technology and Eastern Communications
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Holitech and Eastern is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Holitech Technology Co and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Holitech Technology 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 Holitech Technology Co are associated (or correlated) with Eastern Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Communications has no effect on the direction of Holitech Technology i.e., Holitech Technology and Eastern Communications go up and down completely randomly.
Pair Corralation between Holitech Technology and Eastern Communications
Assuming the 90 days trading horizon Holitech Technology Co is expected to generate 1.46 times more return on investment than Eastern Communications. However, Holitech Technology is 1.46 times more volatile than Eastern Communications Co. It trades about 0.53 of its potential returns per unit of risk. Eastern Communications Co is currently generating about 0.05 per unit of risk. If you would invest 158.00 in Holitech Technology Co on August 28, 2024 and sell it today you would earn a total of 86.00 from holding Holitech Technology Co or generate 54.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holitech Technology Co vs. Eastern Communications Co
Performance |
| Timeline |
| Holitech Technology |
| Eastern Communications |
Holitech Technology and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holitech Technology and Eastern Communications
The main advantage of trading using opposite Holitech Technology and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holitech Technology position performs unexpectedly, Eastern Communications 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 Eastern Communications will offset losses from the drop in Eastern Communications' long position.The idea behind Holitech Technology Co and Eastern Communications Co 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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