Correlation Between Huaku Development and Sweeten Real
Can any of the company-specific risk be diversified away by investing in both Huaku Development and Sweeten Real 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 Huaku Development and Sweeten Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huaku Development Co and Sweeten Real Estate, you can compare the effects of market volatilities on Huaku Development and Sweeten Real 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 Huaku Development with a short position of Sweeten Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaku Development and Sweeten Real.
Diversification Opportunities for Huaku Development and Sweeten Real
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Huaku and Sweeten is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Huaku Development Co and Sweeten Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweeten Real Estate and Huaku Development 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 Huaku Development Co are associated (or correlated) with Sweeten Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweeten Real Estate has no effect on the direction of Huaku Development i.e., Huaku Development and Sweeten Real go up and down completely randomly.
Pair Corralation between Huaku Development and Sweeten Real
Assuming the 90 days trading horizon Huaku Development is expected to generate 1.06 times less return on investment than Sweeten Real. In addition to that, Huaku Development is 1.1 times more volatile than Sweeten Real Estate. It trades about 0.05 of its total potential returns per unit of risk. Sweeten Real Estate is currently generating about 0.05 per unit of volatility. If you would invest 2,360 in Sweeten Real Estate on September 3, 2024 and sell it today you would earn a total of 1,065 from holding Sweeten Real Estate or generate 45.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaku Development Co vs. Sweeten Real Estate
Performance |
| Timeline |
| Huaku Development |
| Sweeten Real Estate |
Huaku Development and Sweeten Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaku Development and Sweeten Real
The main advantage of trading using opposite Huaku Development and Sweeten Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaku Development position performs unexpectedly, Sweeten Real 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 Sweeten Real will offset losses from the drop in Sweeten Real's long position.| Huaku Development vs. Chong Hong Construction | Huaku Development vs. Highwealth Construction Corp | Huaku Development vs. Fubon Financial Holding | Huaku Development vs. CTBC Financial Holding |
| Sweeten Real vs. Chong Hong Construction | Sweeten Real vs. Shining Building Business | Sweeten Real vs. Huaku Development Co | Sweeten Real vs. Founding Construction Development |
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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