Correlation Between Hong Yuan and New Generation
Can any of the company-specific risk be diversified away by investing in both Hong Yuan and New Generation 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 Hong Yuan and New Generation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Yuan Holding and New Generation Consumer, you can compare the effects of market volatilities on Hong Yuan and New Generation 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 Hong Yuan with a short position of New Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Yuan and New Generation.
Diversification Opportunities for Hong Yuan and New Generation
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hong and New is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hong Yuan Holding and New Generation Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Generation Consumer and Hong Yuan 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 Hong Yuan Holding are associated (or correlated) with New Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Generation Consumer has no effect on the direction of Hong Yuan i.e., Hong Yuan and New Generation go up and down completely randomly.
Pair Corralation between Hong Yuan and New Generation
Given the investment horizon of 90 days Hong Yuan Holding is expected to generate 3.01 times more return on investment than New Generation. However, Hong Yuan is 3.01 times more volatile than New Generation Consumer. It trades about 0.16 of its potential returns per unit of risk. New Generation Consumer is currently generating about 0.05 per unit of risk. If you would invest 4.80 in Hong Yuan Holding on September 13, 2024 and sell it today you would earn a total of 0.20 from holding Hong Yuan Holding or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Hong Yuan Holding vs. New Generation Consumer
Performance |
| Timeline |
| Hong Yuan Holding |
| New Generation Consumer |
Hong Yuan and New Generation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Yuan and New Generation
The main advantage of trading using opposite Hong Yuan and New Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Yuan position performs unexpectedly, New Generation 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 New Generation will offset losses from the drop in New Generation's long position.| Hong Yuan vs. New Generation Consumer | Hong Yuan vs. Fbc Hldg | Hong Yuan vs. AVVAA World Health | Hong Yuan vs. IFAN Financial |
| New Generation vs. Green Planet Bio | New Generation vs. Azure Holding Group | New Generation vs. Four Leaf Acquisition | New Generation vs. Opus Magnum Ameris |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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