Correlation Between Hello and Kuaishou Technology
Can any of the company-specific risk be diversified away by investing in both Hello and Kuaishou Technology 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 Hello and Kuaishou Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hello Group and Kuaishou Technology, you can compare the effects of market volatilities on Hello and Kuaishou Technology 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 Hello with a short position of Kuaishou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hello and Kuaishou Technology.
Diversification Opportunities for Hello and Kuaishou Technology
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hello and Kuaishou is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hello Group and Kuaishou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuaishou Technology and Hello 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 Hello Group are associated (or correlated) with Kuaishou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuaishou Technology has no effect on the direction of Hello i.e., Hello and Kuaishou Technology go up and down completely randomly.
Pair Corralation between Hello and Kuaishou Technology
Given the investment horizon of 90 days Hello is expected to generate 19.98 times less return on investment than Kuaishou Technology. But when comparing it to its historical volatility, Hello Group is 2.08 times less risky than Kuaishou Technology. It trades about 0.01 of its potential returns per unit of risk. Kuaishou Technology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 106.00 in Kuaishou Technology on November 4, 2024 and sell it today you would earn a total of 12.00 from holding Kuaishou Technology or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Hello Group vs. Kuaishou Technology
Performance |
| Timeline |
| Hello Group |
| Kuaishou Technology |
Hello and Kuaishou Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hello and Kuaishou Technology
The main advantage of trading using opposite Hello and Kuaishou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hello position performs unexpectedly, Kuaishou Technology 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 Kuaishou Technology will offset losses from the drop in Kuaishou Technology's long position.| Hello vs. Weibo Corp | Hello vs. Autohome | Hello vs. Tencent Music Entertainment | Hello vs. DouYu International Holdings |
| Kuaishou Technology vs. Tencent Holdings | Kuaishou Technology vs. DouYu International Holdings | Kuaishou Technology vs. Tencent Music Entertainment | Kuaishou Technology vs. Weibo Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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