Correlation Between Homecast CoLtd and SH Energy
Can any of the company-specific risk be diversified away by investing in both Homecast CoLtd and SH Energy 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 Homecast CoLtd and SH Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homecast CoLtd and SH Energy Chemical, you can compare the effects of market volatilities on Homecast CoLtd and SH Energy 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 Homecast CoLtd with a short position of SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homecast CoLtd and SH Energy.
Diversification Opportunities for Homecast CoLtd and SH Energy
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Homecast and 002360 is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Homecast CoLtd and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical and Homecast CoLtd 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 Homecast CoLtd are associated (or correlated) with SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of Homecast CoLtd i.e., Homecast CoLtd and SH Energy go up and down completely randomly.
Pair Corralation between Homecast CoLtd and SH Energy
Assuming the 90 days trading horizon Homecast CoLtd is expected to generate 1.49 times more return on investment than SH Energy. However, Homecast CoLtd is 1.49 times more volatile than SH Energy Chemical. It trades about 0.0 of its potential returns per unit of risk. SH Energy Chemical is currently generating about -0.07 per unit of risk. If you would invest 268,500 in Homecast CoLtd on September 2, 2024 and sell it today you would lose (17,000) from holding Homecast CoLtd or give up 6.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homecast CoLtd vs. SH Energy Chemical
Performance |
| Timeline |
| Homecast CoLtd |
| SH Energy Chemical |
Homecast CoLtd and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homecast CoLtd and SH Energy
The main advantage of trading using opposite Homecast CoLtd and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homecast CoLtd position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| Homecast CoLtd vs. Dongsin Engineering Construction | Homecast CoLtd vs. Doosan Fuel Cell | Homecast CoLtd vs. Daishin Balance 1 | Homecast CoLtd vs. Total Soft Bank |
| SH Energy vs. AptaBio Therapeutics | SH Energy vs. Daewoo SBI SPAC | SH Energy vs. Dream Security co | SH Energy vs. Microfriend |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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