Correlation Between Inno Holdings and Huadi International
Can any of the company-specific risk be diversified away by investing in both Inno Holdings and Huadi International 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 Inno Holdings and Huadi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inno Holdings Common and Huadi International Group, you can compare the effects of market volatilities on Inno Holdings and Huadi International 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 Inno Holdings with a short position of Huadi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inno Holdings and Huadi International.
Diversification Opportunities for Inno Holdings and Huadi International
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Inno and Huadi is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Inno Holdings Common and Huadi International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadi International and Inno Holdings 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 Inno Holdings Common are associated (or correlated) with Huadi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadi International has no effect on the direction of Inno Holdings i.e., Inno Holdings and Huadi International go up and down completely randomly.
Pair Corralation between Inno Holdings and Huadi International
Given the investment horizon of 90 days Inno Holdings Common is expected to under-perform the Huadi International. In addition to that, Inno Holdings is 1.94 times more volatile than Huadi International Group. It trades about -0.07 of its total potential returns per unit of risk. Huadi International Group is currently generating about -0.01 per unit of volatility. If you would invest 272.00 in Huadi International Group on September 4, 2024 and sell it today you would lose (78.99) from holding Huadi International Group or give up 29.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.79% |
| Values | Daily Returns |
Inno Holdings Common vs. Huadi International Group
Performance |
| Timeline |
| Inno Holdings Common |
| Huadi International |
Inno Holdings and Huadi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inno Holdings and Huadi International
The main advantage of trading using opposite Inno Holdings and Huadi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inno Holdings position performs unexpectedly, Huadi International 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 Huadi International will offset losses from the drop in Huadi International's long position.| Inno Holdings vs. Mangazeya Mining | Inno Holdings vs. Weibo Corp | Inno Holdings vs. Western Digital | Inno Holdings vs. Senmiao Technology |
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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 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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