Correlation Between Kuaishou Technology and Arena Group
Can any of the company-specific risk be diversified away by investing in both Kuaishou Technology and Arena Group 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 Kuaishou Technology and Arena Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuaishou Technology and Arena Group Holdings, you can compare the effects of market volatilities on Kuaishou Technology and Arena Group 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 Kuaishou Technology with a short position of Arena Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuaishou Technology and Arena Group.
Diversification Opportunities for Kuaishou Technology and Arena Group
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kuaishou and Arena is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kuaishou Technology and Arena Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Group Holdings and Kuaishou Technology 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 Kuaishou Technology are associated (or correlated) with Arena Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Group Holdings has no effect on the direction of Kuaishou Technology i.e., Kuaishou Technology and Arena Group go up and down completely randomly.
Pair Corralation between Kuaishou Technology and Arena Group
Assuming the 90 days horizon Kuaishou Technology is expected to generate 1.39 times less return on investment than Arena Group. But when comparing it to its historical volatility, Kuaishou Technology is 2.1 times less risky than Arena Group. It trades about 0.03 of its potential returns per unit of risk. Arena Group Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 449.00 in Arena Group Holdings on August 28, 2024 and sell it today you would lose (296.00) from holding Arena Group Holdings or give up 65.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuaishou Technology vs. Arena Group Holdings
Performance |
| Timeline |
| Kuaishou Technology |
| Arena Group Holdings |
Kuaishou Technology and Arena Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuaishou Technology and Arena Group
The main advantage of trading using opposite Kuaishou Technology and Arena Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuaishou Technology position performs unexpectedly, Arena Group 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 Arena Group will offset losses from the drop in Arena Group's long position.| Kuaishou Technology vs. Trivago NV | Kuaishou Technology vs. YY Inc Class | Kuaishou Technology vs. DouYu International Holdings | Kuaishou Technology vs. Tencent Music Entertainment |
| Arena Group vs. Trivago NV | Arena Group vs. Cheetah Mobile | Arena Group vs. Comscore | Arena Group vs. Thryv Holdings |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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