Correlation Between Shoe Carnival and Huize Holding

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

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

Diversification Opportunities for Shoe Carnival and Huize Holding

0.15

Correlation Coefficient

Shoe Carnival  Huize Holding

Average diversification

The 3 months correlation between Shoe and Huize is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Shoe Carnival and Huize Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huize Holding and Shoe Carnival 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 Shoe Carnival are associated (or correlated) with Huize Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huize Holding has no effect on the direction of Shoe Carnival i.e., Shoe Carnival and Huize Holding go up and down completely randomly.

Pair Corralation between Shoe Carnival and Huize Holding

Given the investment horizon of 90 days Shoe Carnival is expected to under-perform the Huize Holding. But the stock apears to be less risky and, when comparing its historical volatility, Shoe Carnival is 2.25 times less risky than Huize Holding. The stock trades about -0.02 of its potential returns per unit of risk. The Huize Holding is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  269.00  in Huize Holding on July 15, 2025 and sell it today you would earn a total of  88.00  from holding Huize Holding or generate 32.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Shoe Carnival  vs.  Huize Holding

Shoe Carnival

Risk-Adjusted Performance

Weakest

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

Huize Holding

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Huize Holding are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting forward indicators, Huize Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shoe Carnival and Huize Holding

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

The idea behind Shoe Carnival and Huize Holding 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.