Correlation Between Cloud Air and HLB Power
Can any of the company-specific risk be diversified away by investing in both Cloud Air and HLB Power 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 Air and HLB Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloud Air CoLtd and HLB Power Co, you can compare the effects of market volatilities on Cloud Air and HLB Power 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 Air with a short position of HLB Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Air and HLB Power.
Diversification Opportunities for Cloud Air and HLB Power
Very weak diversification
The 3 months correlation between Cloud and HLB is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Air CoLtd and HLB Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLB Power and Cloud Air 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 Air CoLtd are associated (or correlated) with HLB Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLB Power has no effect on the direction of Cloud Air i.e., Cloud Air and HLB Power go up and down completely randomly.
Pair Corralation between Cloud Air and HLB Power
Assuming the 90 days trading horizon Cloud Air CoLtd is expected to generate 0.43 times more return on investment than HLB Power. However, Cloud Air CoLtd is 2.33 times less risky than HLB Power. It trades about -0.02 of its potential returns per unit of risk. HLB Power Co is currently generating about -0.03 per unit of risk. If you would invest 95,400 in Cloud Air CoLtd on September 12, 2024 and sell it today you would lose (16,000) from holding Cloud Air CoLtd or give up 16.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloud Air CoLtd vs. HLB Power Co
Performance |
| Timeline |
| Cloud Air CoLtd |
| HLB Power |
Cloud Air and HLB Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloud Air and HLB Power
The main advantage of trading using opposite Cloud Air and HLB Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloud Air position performs unexpectedly, HLB Power 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 HLB Power will offset losses from the drop in HLB Power's long position.| Cloud Air vs. SK Hynix | Cloud Air vs. People Technology | Cloud Air vs. Hana Materials | Cloud Air vs. SIMMTECH Co |
| HLB Power vs. Cloud Air CoLtd | HLB Power vs. Jin Air Co | HLB Power vs. Daejung Chemicals Metals | HLB Power vs. iNtRON Biotechnology |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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