Correlation Between Arena Group and Kuaishou Technology
Can any of the company-specific risk be diversified away by investing in both Arena Group and Kuaishou Technology 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 Arena Group and Kuaishou Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arena Group Holdings and Kuaishou Technology, you can compare the effects of market volatilities on Arena Group and Kuaishou Technology 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 Arena Group with a short position of Kuaishou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Group and Kuaishou Technology.
Diversification Opportunities for Arena Group and Kuaishou Technology
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arena and Kuaishou is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Arena Group Holdings and Kuaishou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuaishou Technology and Arena Group 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 Arena Group Holdings are associated (or correlated) with Kuaishou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuaishou Technology has no effect on the direction of Arena Group i.e., Arena Group and Kuaishou Technology go up and down completely randomly.
Pair Corralation between Arena Group and Kuaishou Technology
Given the investment horizon of 90 days Arena Group Holdings is expected to generate 3.86 times more return on investment than Kuaishou Technology. However, Arena Group is 3.86 times more volatile than Kuaishou Technology. It trades about 0.06 of its potential returns per unit of risk. Kuaishou Technology is currently generating about -0.21 per unit of risk. If you would invest 126.00 in Arena Group Holdings on October 25, 2024 and sell it today you would earn a total of 4.00 from holding Arena Group Holdings or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Arena Group Holdings vs. Kuaishou Technology
Performance |
| Timeline |
| Arena Group Holdings |
| Kuaishou Technology |
Arena Group and Kuaishou Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arena Group and Kuaishou Technology
The main advantage of trading using opposite Arena Group and Kuaishou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arena Group position performs unexpectedly, Kuaishou Technology 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 Kuaishou Technology will offset losses from the drop in Kuaishou Technology's long position.| Arena Group vs. Cerberus Cyber Sentinel | Arena Group vs. Alta Equipment Group | Arena Group vs. AN2 Therapeutics | Arena Group vs. KORE Group Holdings |
| Kuaishou Technology vs. Tinybeans Group Limited | Kuaishou Technology vs. DGTL Holdings | Kuaishou Technology vs. Zoomd Technologies | Kuaishou Technology vs. Quizam Media |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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