Correlation Between BuzzFeed and MicroCloud Hologram
Can any of the company-specific risk be diversified away by investing in both BuzzFeed and MicroCloud Hologram 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 BuzzFeed and MicroCloud Hologram into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BuzzFeed and MicroCloud Hologram, you can compare the effects of market volatilities on BuzzFeed and MicroCloud Hologram 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 BuzzFeed with a short position of MicroCloud Hologram. Check out your portfolio center. Please also check ongoing floating volatility patterns of BuzzFeed and MicroCloud Hologram.
Diversification Opportunities for BuzzFeed and MicroCloud Hologram
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BuzzFeed and MicroCloud is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding BuzzFeed and MicroCloud Hologram in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroCloud Hologram and BuzzFeed 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 BuzzFeed are associated (or correlated) with MicroCloud Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroCloud Hologram has no effect on the direction of BuzzFeed i.e., BuzzFeed and MicroCloud Hologram go up and down completely randomly.
Pair Corralation between BuzzFeed and MicroCloud Hologram
Assuming the 90 days horizon BuzzFeed is expected to generate 1.06 times more return on investment than MicroCloud Hologram. However, BuzzFeed is 1.06 times more volatile than MicroCloud Hologram. It trades about 0.44 of its potential returns per unit of risk. MicroCloud Hologram is currently generating about -0.18 per unit of risk. If you would invest 11.00 in BuzzFeed on August 28, 2024 and sell it today you would earn a total of 16.00 from holding BuzzFeed or generate 145.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BuzzFeed vs. MicroCloud Hologram
Performance |
| Timeline |
| BuzzFeed |
| MicroCloud Hologram |
BuzzFeed and MicroCloud Hologram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BuzzFeed and MicroCloud Hologram
The main advantage of trading using opposite BuzzFeed and MicroCloud Hologram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BuzzFeed position performs unexpectedly, MicroCloud Hologram 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 MicroCloud Hologram will offset losses from the drop in MicroCloud Hologram's long position.The idea behind BuzzFeed and MicroCloud Hologram 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.| MicroCloud Hologram vs. Plexus Corp | MicroCloud Hologram vs. OSI Systems | MicroCloud Hologram vs. CTS Corporation | MicroCloud Hologram vs. Benchmark Electronics |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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