Correlation Between Choice Development and Hsin Ba
Can any of the company-specific risk be diversified away by investing in both Choice Development and Hsin Ba 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 Choice Development and Hsin Ba into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choice Development and Hsin Ba Ba, you can compare the effects of market volatilities on Choice Development and Hsin Ba 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 Choice Development with a short position of Hsin Ba. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Development and Hsin Ba.
Diversification Opportunities for Choice Development and Hsin Ba
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Choice and Hsin is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Choice Development and Hsin Ba Ba in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsin Ba Ba and Choice 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 Choice Development are associated (or correlated) with Hsin Ba. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsin Ba Ba has no effect on the direction of Choice Development i.e., Choice Development and Hsin Ba go up and down completely randomly.
Pair Corralation between Choice Development and Hsin Ba
Assuming the 90 days trading horizon Choice Development is expected to generate 0.29 times more return on investment than Hsin Ba. However, Choice Development is 3.43 times less risky than Hsin Ba. It trades about 0.14 of its potential returns per unit of risk. Hsin Ba Ba is currently generating about -0.17 per unit of risk. If you would invest 1,560 in Choice Development on November 7, 2024 and sell it today you would earn a total of 25.00 from holding Choice Development or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Development vs. Hsin Ba Ba
Performance |
| Timeline |
| Choice Development |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Hsin Ba Ba |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Choice Development and Hsin Ba Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Development and Hsin Ba
The main advantage of trading using opposite Choice Development and Hsin Ba positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Development position performs unexpectedly, Hsin Ba 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 Hsin Ba will offset losses from the drop in Hsin Ba's long position.The idea behind Choice Development and Hsin Ba Ba pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |