Correlation Between Great Computer and HIM International
Can any of the company-specific risk be diversified away by investing in both Great Computer and HIM International 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 Great Computer and HIM International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Computer and HIM International Music, you can compare the effects of market volatilities on Great Computer and HIM International 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 Great Computer with a short position of HIM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Computer and HIM International.
Diversification Opportunities for Great Computer and HIM International
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great and HIM is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Great Computer and HIM International Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIM International Music and Great Computer 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 Great Computer are associated (or correlated) with HIM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIM International Music has no effect on the direction of Great Computer i.e., Great Computer and HIM International go up and down completely randomly.
Pair Corralation between Great Computer and HIM International
Assuming the 90 days trading horizon Great Computer is expected to generate 48.98 times more return on investment than HIM International. However, Great Computer is 48.98 times more volatile than HIM International Music. It trades about 0.07 of its potential returns per unit of risk. HIM International Music is currently generating about 0.06 per unit of risk. If you would invest 1,550 in Great Computer on October 12, 2024 and sell it today you would earn a total of 460.00 from holding Great Computer or generate 29.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Computer vs. HIM International Music
Performance |
| Timeline |
| Great Computer |
| HIM International Music |
Great Computer and HIM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Computer and HIM International
The main advantage of trading using opposite Great Computer and HIM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Computer position performs unexpectedly, HIM International 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 HIM International will offset losses from the drop in HIM International's long position.| Great Computer vs. Li Kang Biomedical | Great Computer vs. ReaLy Development Construction | Great Computer vs. Lihtai Construction Enterprise | Great Computer vs. Energenesis Biomedical Co |
| HIM International vs. Great Computer | HIM International vs. Kworld Computer Co | HIM International vs. Onyx Healthcare | HIM International vs. Healthconn 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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