Correlation Between China Index and CooTek

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Can any of the company-specific risk be diversified away by investing in both China Index and CooTek 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 China Index and CooTek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Index Holdings and CooTek Inc, you can compare the effects of market volatilities on China Index and CooTek 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 China Index with a short position of CooTek. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Index and CooTek.

Diversification Opportunities for China Index and CooTek

0.0
  Correlation Coefficient

Pay attention - limited upside

The 11 months correlation between China and CooTek is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Index Holdings and CooTek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CooTek Inc and China Index 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 China Index Holdings are associated (or correlated) with CooTek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CooTek Inc has no effect on the direction of China Index i.e., China Index and CooTek go up and down completely randomly.

Pair Corralation between China Index and CooTek

If you would invest  97.00  in China Index Holdings on December 20, 2023 and sell it today you would lose (2.00) from holding China Index Holdings or give up 2.06% of portfolio value over 90 days.
Time Period11 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

China Index Holdings  vs.  CooTek Inc

 Performance 
       Timeline  
China Index Holdings 

Risk-Adjusted Performance

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Over the last 90 days China Index Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, China Index is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.
CooTek Inc 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days CooTek Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, CooTek is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

China Index and CooTek Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with China Index and CooTek

The main advantage of trading using opposite China Index and CooTek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Index position performs unexpectedly, CooTek 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 CooTek will offset losses from the drop in CooTek's long position.
The idea behind China Index Holdings and CooTek Inc 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.

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