Correlation Between Cloud Live and Guangzhou Haozhi

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

Diversification Opportunities for Cloud Live and Guangzhou Haozhi

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Cloud and Guangzhou is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Live Technology and Guangzhou Haozhi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haozhi Ind and Cloud Live 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 Cloud Live Technology are associated (or correlated) with Guangzhou Haozhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haozhi Ind has no effect on the direction of Cloud Live i.e., Cloud Live and Guangzhou Haozhi go up and down completely randomly.

Pair Corralation between Cloud Live and Guangzhou Haozhi

Assuming the 90 days trading horizon Cloud Live Technology is expected to under-perform the Guangzhou Haozhi. In addition to that, Cloud Live is 1.17 times more volatile than Guangzhou Haozhi Industrial. It trades about -0.37 of its total potential returns per unit of risk. Guangzhou Haozhi Industrial is currently generating about 0.15 per unit of volatility. If you would invest  2,082  in Guangzhou Haozhi Industrial on October 28, 2024 and sell it today you would earn a total of  249.00  from holding Guangzhou Haozhi Industrial or generate 11.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Cloud Live Technology  vs.  Guangzhou Haozhi Industrial

 Performance 
       Timeline  
Cloud Live Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cloud Live Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Guangzhou Haozhi Ind 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Guangzhou Haozhi Industrial are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guangzhou Haozhi sustained solid returns over the last few months and may actually be approaching a breakup point.

Cloud Live and Guangzhou Haozhi Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cloud Live and Guangzhou Haozhi

The main advantage of trading using opposite Cloud Live and Guangzhou Haozhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloud Live position performs unexpectedly, Guangzhou Haozhi 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 Guangzhou Haozhi will offset losses from the drop in Guangzhou Haozhi's long position.
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The idea behind Cloud Live Technology and Guangzhou Haozhi Industrial 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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