Correlation Between Holitech Technology and Inner Mongolia

Can any of the company-specific risk be diversified away by investing in both Holitech Technology and Inner Mongolia 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 Holitech Technology and Inner Mongolia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Holitech Technology Co and Inner Mongolia Junzheng, you can compare the effects of market volatilities on Holitech Technology and Inner Mongolia 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 Holitech Technology with a short position of Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holitech Technology and Inner Mongolia.

Diversification Opportunities for Holitech Technology and Inner Mongolia

0.77

Correlation Coefficient

Holitech Technology  Inner Mongolia

Poor diversification

The 3 months correlation between Holitech and Inner is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Holitech Technology Co and Inner Mongolia Junzheng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia Junzheng and Holitech 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 Holitech Technology Co are associated (or correlated) with Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia Junzheng has no effect on the direction of Holitech Technology i.e., Holitech Technology and Inner Mongolia go up and down completely randomly.

Pair Corralation between Holitech Technology and Inner Mongolia

Assuming the 90 days trading horizon Holitech Technology is expected to generate 1.06 times less return on investment than Inner Mongolia. In addition to that, Holitech Technology is 1.7 times more volatile than Inner Mongolia Junzheng. It trades about 0.02 of its total potential returns per unit of risk. Inner Mongolia Junzheng is currently generating about 0.03 per unit of volatility. If you would invest  446.00  in Inner Mongolia Junzheng on September 30, 2024 and sell it today you would earn a total of  104.00  from holding Inner Mongolia Junzheng or generate 23.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Holitech Technology Co  vs.  Inner Mongolia Junzheng

Holitech Technology

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Holitech Technology Co are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Holitech Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Inner Mongolia Junzheng

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inner Mongolia Junzheng are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Inner Mongolia sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Holitech Technology and Inner Mongolia

The main advantage of trading using opposite Holitech Technology and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holitech Technology position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia's long position.

The idea behind Holitech Technology Co and Inner Mongolia Junzheng pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.