Correlation Between Houlihan Lokey and Zhong Yang
Can any of the company-specific risk be diversified away by investing in both Houlihan Lokey and Zhong Yang 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 Houlihan Lokey and Zhong Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Houlihan Lokey and Zhong Yang Financial, you can compare the effects of market volatilities on Houlihan Lokey and Zhong Yang 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 Houlihan Lokey with a short position of Zhong Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Houlihan Lokey and Zhong Yang.
Diversification Opportunities for Houlihan Lokey and Zhong Yang
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Houlihan and Zhong is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Houlihan Lokey and Zhong Yang Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhong Yang Financial and Houlihan Lokey 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 Houlihan Lokey are associated (or correlated) with Zhong Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhong Yang Financial has no effect on the direction of Houlihan Lokey i.e., Houlihan Lokey and Zhong Yang go up and down completely randomly.
Pair Corralation between Houlihan Lokey and Zhong Yang
Considering the 90-day investment horizon Houlihan Lokey is expected to generate 6.49 times less return on investment than Zhong Yang. But when comparing it to its historical volatility, Houlihan Lokey is 16.03 times less risky than Zhong Yang. It trades about 0.11 of its potential returns per unit of risk. Zhong Yang Financial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 444.00 in Zhong Yang Financial on September 12, 2024 and sell it today you would lose (278.00) from holding Zhong Yang Financial or give up 62.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Houlihan Lokey vs. Zhong Yang Financial
Performance |
| Timeline |
| Houlihan Lokey |
| Zhong Yang Financial |
Houlihan Lokey and Zhong Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Houlihan Lokey and Zhong Yang
The main advantage of trading using opposite Houlihan Lokey and Zhong Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Houlihan Lokey position performs unexpectedly, Zhong Yang 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 Zhong Yang will offset losses from the drop in Zhong Yang's long position.| Houlihan Lokey vs. Lazard | Houlihan Lokey vs. PJT Partners | Houlihan Lokey vs. Moelis Co | Houlihan Lokey vs. Piper Sandler Companies |
| Zhong Yang vs. Scully Royalty | Zhong Yang vs. Oppenheimer Holdings | Zhong Yang vs. Houlihan Lokey | Zhong Yang vs. Stonex Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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