Correlation Between Cheer Holding and Oriental Culture
Can any of the company-specific risk be diversified away by investing in both Cheer Holding and Oriental Culture 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 Cheer Holding and Oriental Culture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheer Holding and Oriental Culture Holding, you can compare the effects of market volatilities on Cheer Holding and Oriental Culture 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 Cheer Holding with a short position of Oriental Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheer Holding and Oriental Culture.
Diversification Opportunities for Cheer Holding and Oriental Culture
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cheer and Oriental is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cheer Holding and Oriental Culture Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Culture Holding and Cheer Holding 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 Cheer Holding are associated (or correlated) with Oriental Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Culture Holding has no effect on the direction of Cheer Holding i.e., Cheer Holding and Oriental Culture go up and down completely randomly.
Pair Corralation between Cheer Holding and Oriental Culture
Considering the 90-day investment horizon Cheer Holding is expected to under-perform the Oriental Culture. But the stock apears to be less risky and, when comparing its historical volatility, Cheer Holding is 3.43 times less risky than Oriental Culture. The stock trades about -0.11 of its potential returns per unit of risk. The Oriental Culture Holding is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 103.00 in Oriental Culture Holding on August 28, 2024 and sell it today you would earn a total of 19.00 from holding Oriental Culture Holding or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheer Holding vs. Oriental Culture Holding
Performance |
| Timeline |
| Cheer Holding |
| Oriental Culture Holding |
Cheer Holding and Oriental Culture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheer Holding and Oriental Culture
The main advantage of trading using opposite Cheer Holding and Oriental Culture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheer Holding position performs unexpectedly, Oriental Culture 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 Oriental Culture will offset losses from the drop in Oriental Culture's long position.| Cheer Holding vs. Inter Parfums | Cheer Holding vs. Albertsons Companies | Cheer Holding vs. Weyco Group | Cheer Holding vs. NH Foods Ltd |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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