Correlation Between Blue Hat and NetEase

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

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

Diversification Opportunities for Blue Hat and NetEase

-0.56

Correlation Coefficient

Blue Hat  NetEase

Excellent diversification

The 3 months correlation between Blue and NetEase is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Blue Hat Interactive and NetEase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetEase and Blue Hat 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 Blue Hat Interactive are associated (or correlated) with NetEase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetEase has no effect on the direction of Blue Hat i.e., Blue Hat and NetEase go up and down completely randomly.

Pair Corralation between Blue Hat and NetEase

Given the investment horizon of 90 days Blue Hat Interactive is expected to under-perform the NetEase. In addition to that, Blue Hat is 1.71 times more volatile than NetEase. It trades about -0.03 of its total potential returns per unit of risk. NetEase is currently generating about 0.16 per unit of volatility. If you would invest  10,619  in NetEase on May 1, 2025 and sell it today you would earn a total of  2,534  from holding NetEase or generate 23.86% return on investment over 90 days.

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

Blue Hat Interactive  vs.  NetEase

Blue Hat Interactive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blue Hat Interactive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

NetEase

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NetEase are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent technical and fundamental indicators, NetEase unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Hat and NetEase

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

The idea behind Blue Hat Interactive and NetEase 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.