Correlation Between Cloudflare and Hi Sun
Can any of the company-specific risk be diversified away by investing in both Cloudflare and Hi Sun 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 Cloudflare and Hi Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloudflare and Hi Sun Technology, you can compare the effects of market volatilities on Cloudflare and Hi Sun 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 Cloudflare with a short position of Hi Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloudflare and Hi Sun.
Diversification Opportunities for Cloudflare and Hi Sun
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cloudflare and HISNF is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cloudflare and Hi Sun Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Sun Technology and Cloudflare 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 Cloudflare are associated (or correlated) with Hi Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Sun Technology has no effect on the direction of Cloudflare i.e., Cloudflare and Hi Sun go up and down completely randomly.
Pair Corralation between Cloudflare and Hi Sun
Considering the 90-day investment horizon Cloudflare is expected to generate 3.44 times less return on investment than Hi Sun. But when comparing it to its historical volatility, Cloudflare is 4.89 times less risky than Hi Sun. It trades about 0.31 of its potential returns per unit of risk. Hi Sun Technology is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3.20 in Hi Sun Technology on November 22, 2024 and sell it today you would earn a total of 3.48 from holding Hi Sun Technology or generate 108.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloudflare vs. Hi Sun Technology
Performance |
| Timeline |
| Cloudflare |
| Hi Sun Technology |
Cloudflare and Hi Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloudflare and Hi Sun
The main advantage of trading using opposite Cloudflare and Hi Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloudflare position performs unexpectedly, Hi Sun 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 Hi Sun will offset losses from the drop in Hi Sun's long position.| Cloudflare vs. Palo Alto Networks | Cloudflare vs. Zscaler | Cloudflare vs. Okta Inc | Cloudflare vs. Adobe Systems Incorporated |
| Hi Sun vs. Argentum 47 | Hi Sun vs. Arax Holdings Corp | Hi Sun vs. Fobi AI | Hi Sun vs. AppTech Payments 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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