Correlation Between Guangzhou Tinci and MayAir Technology

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

By analyzing existing cross correlation between Guangzhou Tinci Materials and MayAir Technology Co, you can compare the effects of market volatilities on Guangzhou Tinci and MayAir Technology 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 Guangzhou Tinci with a short position of MayAir Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Tinci and MayAir Technology.

Diversification Opportunities for Guangzhou Tinci and MayAir Technology

0.38

Correlation Coefficient

Guangzhou Tinci  MayAir Technology

Weak diversification

The 3 months correlation between Guangzhou and MayAir is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Tinci Materials and MayAir Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MayAir Technology and Guangzhou Tinci 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 Guangzhou Tinci Materials are associated (or correlated) with MayAir Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MayAir Technology has no effect on the direction of Guangzhou Tinci i.e., Guangzhou Tinci and MayAir Technology go up and down completely randomly.

Pair Corralation between Guangzhou Tinci and MayAir Technology

Assuming the 90 days trading horizon Guangzhou Tinci Materials is expected to under-perform the MayAir Technology. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Tinci Materials is 1.17 times less risky than MayAir Technology. The stock trades about -0.5 of its potential returns per unit of risk. The MayAir Technology Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  3,607  in MayAir Technology Co on September 29, 2024 and sell it today you would lose (124.00) from holding MayAir Technology Co or give up 3.44% of portfolio value over 90 days.

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

Guangzhou Tinci Materials  vs.  MayAir Technology Co

Guangzhou Tinci Materials

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guangzhou Tinci Materials are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guangzhou Tinci sustained solid returns over the last few months and may actually be approaching a breakup point.

MayAir Technology

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Guangzhou Tinci and MayAir Technology

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

The idea behind Guangzhou Tinci Materials and MayAir Technology Co 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.