Correlation Between News Cp and Sohu Inc

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

Diversification Opportunities for News Cp and Sohu Inc

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between News Cp and Sohu Inc is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding News Cp Cl and Sohu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sohu Inc ADR and News Cp 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 News Cp Cl are associated (or correlated) with Sohu Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sohu Inc ADR has no effect on the direction of News Cp i.e., News Cp and Sohu Inc go up and down completely randomly.

Pair Corralation between News Cp and Sohu Inc

Given the investment horizon of 90 days News Cp Cl is expected to under-perform the Sohu Inc. But the stock apears to be less risky and, when comparing its historical volatility, News Cp Cl is 1.77 times less risky than Sohu Inc. The stock trades about -0.06 of its potential returns per unit of risk. The Sohu Inc ADR is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,816  in Sohu Inc ADR on July 5, 2022 and sell it today you would lose (148.00)  from holding Sohu Inc ADR or give up 8.15% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

News Cp Cl  vs.  Sohu Inc ADR

 Performance (%) 
       Timeline  
News Cp Cl 
News Cp Performance
0 of 100
Over the last 90 days News Cp Cl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, News Cp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

News Cp Price Channel

Sohu Inc ADR 
Sohu Inc Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Sohu Inc ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, Sohu Inc may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Sohu Inc Price Channel

News Cp and Sohu Inc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with News Cp and Sohu Inc

The main advantage of trading using opposite News Cp and Sohu Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Cp position performs unexpectedly, Sohu Inc 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 Sohu Inc will offset losses from the drop in Sohu Inc's long position.
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The idea behind News Cp Cl and Sohu Inc ADR 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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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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