Correlation Between MicroCloud Hologram and Flex

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

By analyzing existing cross correlation between MicroCloud Hologram and Flex, you can compare the effects of market volatilities on MicroCloud Hologram and Flex 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 MicroCloud Hologram with a short position of Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroCloud Hologram and Flex.

Diversification Opportunities for MicroCloud Hologram and Flex

-0.8

Correlation Coefficient

MicroCloud Hologram  Flex

Pay attention - limited upside

The 3 months correlation between MicroCloud and Flex is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding MicroCloud Hologram and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex and MicroCloud Hologram 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 MicroCloud Hologram are associated (or correlated) with Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of MicroCloud Hologram i.e., MicroCloud Hologram and Flex go up and down completely randomly.

Pair Corralation between MicroCloud Hologram and Flex

Given the investment horizon of 90 days MicroCloud Hologram is expected to generate 12.19 times more return on investment than Flex. However, MicroCloud Hologram is 12.19 times more volatile than Flex. It trades about 0.03 of its potential returns per unit of risk. Flex is currently generating about 0.09 per unit of risk. If you would invest  49,000  in MicroCloud Hologram on September 21, 2024 and sell it today you would lose (48,862) from holding MicroCloud Hologram or give up 99.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

MicroCloud Hologram  vs.  Flex

MicroCloud Hologram

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MicroCloud Hologram has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Flex

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flex are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Flex showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MicroCloud Hologram and Flex

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

The idea behind MicroCloud Hologram and Flex 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.