Correlation Between Gotion High and Hainan HNA

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

Diversification Opportunities for Gotion High and Hainan HNA

GotionHainanDiversified AwayGotionHainanDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Gotion High and Hainan HNA

If you would invest (100.00) in Hainan HNA Infrastructure on October 11, 2024 and sell it today you would earn a total of  100.00  from holding Hainan HNA Infrastructure or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Gotion High tech  vs.  Hainan HNA Infrastructure

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -10-50510
JavaScript chart by amCharts 3.21.15002074 600515
       Timeline  
Gotion High tech 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Gotion High tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Gotion High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan20212223242526
Hainan HNA Infrastructure 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hainan HNA Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hainan HNA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gotion High and Hainan HNA Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.82-3.61-2.4-1.19-0.01931.142.33.464.61 0.010.020.030.04
JavaScript chart by amCharts 3.21.15002074 600515
       Returns  

Pair Trading with Gotion High and Hainan HNA

The main advantage of trading using opposite Gotion High and Hainan HNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gotion High position performs unexpectedly, Hainan HNA 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 Hainan HNA will offset losses from the drop in Hainan HNA's long position.
The idea behind Gotion High tech and Hainan HNA Infrastructure 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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