Correlation Between Hour Loop and Oriental Culture
Can any of the company-specific risk be diversified away by investing in both Hour Loop 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 Hour Loop and Oriental Culture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hour Loop and Oriental Culture Holding, you can compare the effects of market volatilities on Hour Loop 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 Hour Loop with a short position of Oriental Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hour Loop and Oriental Culture.
Diversification Opportunities for Hour Loop and Oriental Culture
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hour and Oriental is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hour Loop 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 Hour Loop 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 Hour Loop 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 Hour Loop i.e., Hour Loop and Oriental Culture go up and down completely randomly.
Pair Corralation between Hour Loop and Oriental Culture
Given the investment horizon of 90 days Hour Loop is expected to generate 1.71 times more return on investment than Oriental Culture. However, Hour Loop is 1.71 times more volatile than Oriental Culture Holding. It trades about 0.04 of its potential returns per unit of risk. Oriental Culture Holding is currently generating about 0.0 per unit of risk. If you would invest 166.00 in Hour Loop on October 24, 2024 and sell it today you would earn a total of 55.00 from holding Hour Loop or generate 33.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hour Loop vs. Oriental Culture Holding
Performance |
| Timeline |
| Hour Loop |
| Oriental Culture Holding |
Hour Loop and Oriental Culture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hour Loop and Oriental Culture
The main advantage of trading using opposite Hour Loop and Oriental Culture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hour Loop 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.| Hour Loop vs. Qurate Retail Series | Hour Loop vs. iPower Inc | Hour Loop vs. MOGU Inc | Hour Loop vs. Qurate Retail |
| Oriental Culture vs. Hour Loop | Oriental Culture vs. Jowell Global | Oriental Culture vs. Qurate Retail Series | Oriental Culture vs. Emerge Commerce |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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