Correlation Between Cloud Air and HB Technology
Can any of the company-specific risk be diversified away by investing in both Cloud Air and HB Technology 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 HB Technology 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 HB Technology TD, you can compare the effects of market volatilities on Cloud Air and HB Technology 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 HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Air and HB Technology.
Diversification Opportunities for Cloud Air and HB Technology
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cloud and 078150 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Air CoLtd and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD 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 HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of Cloud Air i.e., Cloud Air and HB Technology go up and down completely randomly.
Pair Corralation between Cloud Air and HB Technology
Assuming the 90 days trading horizon Cloud Air CoLtd is expected to generate 0.46 times more return on investment than HB Technology. However, Cloud Air CoLtd is 2.17 times less risky than HB Technology. It trades about 0.02 of its potential returns per unit of risk. HB Technology TD is currently generating about -0.03 per unit of risk. If you would invest 86,400 in Cloud Air CoLtd on October 13, 2024 and sell it today you would earn a total of 2,100 from holding Cloud Air CoLtd or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloud Air CoLtd vs. HB Technology TD
Performance |
| Timeline |
| Cloud Air CoLtd |
| HB Technology TD |
Cloud Air and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloud Air and HB Technology
The main advantage of trading using opposite Cloud Air and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloud Air position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology's long position.| Cloud Air vs. CU Tech Corp | Cloud Air vs. Lion Chemtech Co | Cloud Air vs. Korea Information Communications | Cloud Air vs. V One Tech Co |
| HB Technology vs. Cloud Air CoLtd | HB Technology vs. Namhwa Industrial Co | HB Technology vs. PJ Metal Co | HB Technology vs. Nice Information Telecommunication |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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