Correlation Between Huize Holding and Fangdd Network
Can any of the company-specific risk be diversified away by investing in both Huize Holding and Fangdd Network 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 Huize Holding and Fangdd Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huize Holding and Fangdd Network Group, you can compare the effects of market volatilities on Huize Holding and Fangdd Network 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 Huize Holding with a short position of Fangdd Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huize Holding and Fangdd Network.
Diversification Opportunities for Huize Holding and Fangdd Network
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Huize and Fangdd is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Huize Holding and Fangdd Network Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fangdd Network Group and Huize 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 Huize Holding are associated (or correlated) with Fangdd Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fangdd Network Group has no effect on the direction of Huize Holding i.e., Huize Holding and Fangdd Network go up and down completely randomly.
Pair Corralation between Huize Holding and Fangdd Network
Given the investment horizon of 90 days Huize Holding is expected to generate 11.53 times less return on investment than Fangdd Network. But when comparing it to its historical volatility, Huize Holding is 4.86 times less risky than Fangdd Network. It trades about 0.03 of its potential returns per unit of risk. Fangdd Network Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 54.00 in Fangdd Network Group on August 27, 2024 and sell it today you would lose (2.00) from holding Fangdd Network Group or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huize Holding vs. Fangdd Network Group
Performance |
| Timeline |
| Huize Holding |
| Fangdd Network Group |
Huize Holding and Fangdd Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huize Holding and Fangdd Network
The main advantage of trading using opposite Huize Holding and Fangdd Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huize Holding position performs unexpectedly, Fangdd Network 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 Fangdd Network will offset losses from the drop in Fangdd Network's long position.| Huize Holding vs. CorVel Corp | Huize Holding vs. Erie Indemnity | Huize Holding vs. Crawford Company | Huize Holding vs. eHealth |
| Fangdd Network vs. MDJM | Fangdd Network vs. Southcorp Capital | Fangdd Network vs. Frp Holdings Ord | Fangdd Network vs. Ucommune International |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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