Correlation Between Holy Stone and Zhen Ding
Can any of the company-specific risk be diversified away by investing in both Holy Stone and Zhen Ding 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 Holy Stone and Zhen Ding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holy Stone Enterprise and Zhen Ding Technology, you can compare the effects of market volatilities on Holy Stone and Zhen Ding 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 Holy Stone with a short position of Zhen Ding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holy Stone and Zhen Ding.
Diversification Opportunities for Holy Stone and Zhen Ding
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Holy and Zhen is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Holy Stone Enterprise and Zhen Ding Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhen Ding Technology and Holy Stone 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 Holy Stone Enterprise are associated (or correlated) with Zhen Ding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhen Ding Technology has no effect on the direction of Holy Stone i.e., Holy Stone and Zhen Ding go up and down completely randomly.
Pair Corralation between Holy Stone and Zhen Ding
Assuming the 90 days trading horizon Holy Stone Enterprise is expected to generate 0.27 times more return on investment than Zhen Ding. However, Holy Stone Enterprise is 3.64 times less risky than Zhen Ding. It trades about 0.05 of its potential returns per unit of risk. Zhen Ding Technology is currently generating about -0.15 per unit of risk. If you would invest 8,610 in Holy Stone Enterprise on October 24, 2024 and sell it today you would earn a total of 40.00 from holding Holy Stone Enterprise or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holy Stone Enterprise vs. Zhen Ding Technology
Performance |
| Timeline |
| Holy Stone Enterprise |
| Zhen Ding Technology |
Holy Stone and Zhen Ding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holy Stone and Zhen Ding
The main advantage of trading using opposite Holy Stone and Zhen Ding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holy Stone position performs unexpectedly, Zhen Ding 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 Zhen Ding will offset losses from the drop in Zhen Ding's long position.| Holy Stone vs. Walsin Technology Corp | Holy Stone vs. Yageo Corp | Holy Stone vs. Tripod Technology Corp | Holy Stone vs. Asia Optical Co |
| Zhen Ding vs. Unimicron Technology Corp | Zhen Ding vs. Flexium Interconnect | Zhen Ding vs. Catcher Technology Co | Zhen Ding vs. Pegatron Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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