Correlation Between CooTek and China Index

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

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

Diversification Opportunities for CooTek and China Index

0.0

Correlation Coefficient

CooTek  China Index

Pay attention - limited upside

The 3 months correlation between CooTek and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CooTek Inc and China Index Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Index Holdings and CooTek 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 CooTek Inc are associated (or correlated) with China Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Index Holdings has no effect on the direction of CooTek i.e., CooTek and China Index go up and down completely randomly.

Pair Corralation between CooTek and China Index

If you would invest  95.00  in China Index Holdings on January 26, 2024 and sell it today you would earn a total of  0.00  from holding China Index Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CooTek Inc  vs.  China Index Holdings

CooTek Inc

Risk-Adjusted Performance

0 of 100

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 Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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.

Pair Trading with CooTek and China Index

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

The idea behind CooTek Inc and China Index Holdings 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.