Correlation Between Associated Capital and Huize Holding
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Huize Holding 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 Associated Capital and Huize Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Huize Holding, you can compare the effects of market volatilities on Associated Capital and Huize Holding 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 Associated Capital with a short position of Huize Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Huize Holding.
Diversification Opportunities for Associated Capital and Huize Holding
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Associated and Huize is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Huize Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huize Holding and Associated Capital 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 Associated Capital Group are associated (or correlated) with Huize Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huize Holding has no effect on the direction of Associated Capital i.e., Associated Capital and Huize Holding go up and down completely randomly.
Pair Corralation between Associated Capital and Huize Holding
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 58.85 times less return on investment than Huize Holding. But when comparing it to its historical volatility, Associated Capital Group is 28.33 times less risky than Huize Holding. It trades about 0.02 of its potential returns per unit of risk. Huize Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 120.00 in Huize Holding on November 9, 2024 and sell it today you would earn a total of 201.00 from holding Huize Holding or generate 167.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Huize Holding
Performance |
| Timeline |
| Associated Capital |
| Huize Holding |
Associated Capital and Huize Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Huize Holding
The main advantage of trading using opposite Associated Capital and Huize Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Huize Holding 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 Huize Holding will offset losses from the drop in Huize Holding's long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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