Correlation Between Arhaus and China Unicom

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

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

Diversification Opportunities for Arhaus and China Unicom

0.0

Correlation Coefficient

Arhaus  China Unicom

Pay attention - limited upside

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

Pair Corralation between Arhaus and China Unicom

If you would invest (100.00) in China Unicom Limited on February 4, 2024 and sell it today you would earn a total of  100.00  from holding China Unicom Limited or generate -100.0% return on investment over 90 days.

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

Arhaus Inc  vs.  China Unicom Limited

Arhaus Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arhaus Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, Arhaus unveiled solid returns over the last few months and may actually be approaching a breakup point.

China Unicom Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Unicom Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, China Unicom is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Arhaus and China Unicom

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

The idea behind Arhaus Inc and China Unicom Limited 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.

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 the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.