Correlation Between PDD Holdings and Hour Loop
Can any of the company-specific risk be diversified away by investing in both PDD Holdings and Hour Loop 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 PDD Holdings and Hour Loop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PDD Holdings and Hour Loop, you can compare the effects of market volatilities on PDD Holdings and Hour Loop 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 PDD Holdings with a short position of Hour Loop. Check out your portfolio center. Please also check ongoing floating volatility patterns of PDD Holdings and Hour Loop.
Diversification Opportunities for PDD Holdings and Hour Loop
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PDD and Hour is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding PDD Holdings and Hour Loop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hour Loop and PDD 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 PDD Holdings are associated (or correlated) with Hour Loop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hour Loop has no effect on the direction of PDD Holdings i.e., PDD Holdings and Hour Loop go up and down completely randomly.
Pair Corralation between PDD Holdings and Hour Loop
Considering the 90-day investment horizon PDD Holdings is expected to generate 30.98 times less return on investment than Hour Loop. But when comparing it to its historical volatility, PDD Holdings is 12.51 times less risky than Hour Loop. It trades about 0.04 of its potential returns per unit of risk. Hour Loop is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 146.00 in Hour Loop on October 25, 2024 and sell it today you would earn a total of 68.00 from holding Hour Loop or generate 46.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PDD Holdings vs. Hour Loop
Performance |
| Timeline |
| PDD Holdings |
| Hour Loop |
PDD Holdings and Hour Loop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PDD Holdings and Hour Loop
The main advantage of trading using opposite PDD Holdings and Hour Loop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDD Holdings position performs unexpectedly, Hour Loop 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 Hour Loop will offset losses from the drop in Hour Loop's long position.| PDD Holdings vs. Alibaba Group Holding | PDD Holdings vs. Sea | PDD Holdings vs. MercadoLibre | PDD Holdings vs. Vipshop Holdings Limited |
| Hour Loop vs. Qurate Retail Series | Hour Loop vs. iPower Inc | Hour Loop vs. MOGU Inc | Hour Loop vs. Qurate Retail |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |