Correlation Between Holitech Technology and Beken Corp

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Can any of the company-specific risk be diversified away by investing in both Holitech Technology and Beken Corp 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 Beken Corp 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 Beken Corp, you can compare the effects of market volatilities on Holitech Technology and Beken Corp 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 Beken Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holitech Technology and Beken Corp.

Diversification Opportunities for Holitech Technology and Beken Corp

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Holitech and Beken is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Holitech Technology Co and Beken Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beken Corp 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 Beken Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beken Corp has no effect on the direction of Holitech Technology i.e., Holitech Technology and Beken Corp go up and down completely randomly.

Pair Corralation between Holitech Technology and Beken Corp

Assuming the 90 days trading horizon Holitech Technology Co is expected to generate 0.85 times more return on investment than Beken Corp. However, Holitech Technology Co is 1.18 times less risky than Beken Corp. It trades about 0.36 of its potential returns per unit of risk. Beken Corp is currently generating about 0.25 per unit of risk. If you would invest  125.00  in Holitech Technology Co on September 23, 2024 and sell it today you would earn a total of  125.00  from holding Holitech Technology Co or generate 100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Holitech Technology Co  vs.  Beken Corp

 Performance 
       Timeline  
Holitech Technology 

Risk-Adjusted Performance

28 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Holitech Technology Co are ranked lower than 28 (%) 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.
Beken Corp 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Beken Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beken Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Holitech Technology and Beken Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Holitech Technology and Beken Corp

The main advantage of trading using opposite Holitech Technology and Beken Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holitech Technology position performs unexpectedly, Beken Corp 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 Beken Corp will offset losses from the drop in Beken Corp's long position.
The idea behind Holitech Technology Co and Beken Corp 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.
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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