Correlation Between Bright Led and Holy Stone
Can any of the company-specific risk be diversified away by investing in both Bright Led and Holy Stone 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 Bright Led and Holy Stone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Led Electronics and Holy Stone Enterprise, you can compare the effects of market volatilities on Bright Led and Holy Stone 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 Bright Led with a short position of Holy Stone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Led and Holy Stone.
Diversification Opportunities for Bright Led and Holy Stone
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bright and Holy is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bright Led Electronics and Holy Stone Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holy Stone Enterprise and Bright Led 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 Bright Led Electronics are associated (or correlated) with Holy Stone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holy Stone Enterprise has no effect on the direction of Bright Led i.e., Bright Led and Holy Stone go up and down completely randomly.
Pair Corralation between Bright Led and Holy Stone
Assuming the 90 days trading horizon Bright Led Electronics is expected to generate 2.28 times more return on investment than Holy Stone. However, Bright Led is 2.28 times more volatile than Holy Stone Enterprise. It trades about 0.05 of its potential returns per unit of risk. Holy Stone Enterprise is currently generating about -0.01 per unit of risk. If you would invest 1,535 in Bright Led Electronics on October 11, 2024 and sell it today you would earn a total of 870.00 from holding Bright Led Electronics or generate 56.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bright Led Electronics vs. Holy Stone Enterprise
Performance |
| Timeline |
| Bright Led Electronics |
| Holy Stone Enterprise |
Bright Led and Holy Stone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Led and Holy Stone
The main advantage of trading using opposite Bright Led and Holy Stone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Led position performs unexpectedly, Holy Stone 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 Holy Stone will offset losses from the drop in Holy Stone's long position.| Bright Led vs. Everlight Electronics Co | Bright Led vs. Harvatek Corp | Bright Led vs. Optotech Corp | Bright Led vs. I Chiun Precision Industry |
| Holy Stone vs. Walsin Technology Corp | Holy Stone vs. Yageo Corp | Holy Stone vs. Tripod Technology Corp | Holy Stone vs. Asia Optical Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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