Correlation Between Guosheng Financial and V V

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

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

Diversification Opportunities for Guosheng Financial and V V

0.92

Correlation Coefficient

Guosheng Financial  V V

Almost no diversification

The 3 months correlation between Guosheng and 600300 is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Guosheng Financial Holding and V V Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V V Food and Guosheng Financial 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 Guosheng Financial Holding are associated (or correlated) with V V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V V Food has no effect on the direction of Guosheng Financial i.e., Guosheng Financial and V V go up and down completely randomly.

Pair Corralation between Guosheng Financial and V V

Assuming the 90 days trading horizon Guosheng Financial is expected to generate 1.46 times less return on investment than V V. In addition to that, Guosheng Financial is 1.52 times more volatile than V V Food. It trades about 0.04 of its total potential returns per unit of risk. V V Food is currently generating about 0.08 per unit of volatility. If you would invest  266.00  in V V Food on October 9, 2024 and sell it today you would earn a total of  35.00  from holding V V Food or generate 13.16% return on investment over 90 days.

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

Guosheng Financial Holding  vs.  V V Food

Guosheng Financial

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guosheng Financial Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guosheng Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

V V Food

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in V V Food are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V V sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guosheng Financial and V V

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

The idea behind Guosheng Financial Holding and V V Food 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.