Correlation Between Qingdao Gon and China Resources

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

By analyzing existing cross correlation between Qingdao Gon Technology and China Resources Sanjiu, you can compare the effects of market volatilities on Qingdao Gon and China Resources 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 Qingdao Gon with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Gon and China Resources.

Diversification Opportunities for Qingdao Gon and China Resources

-0.15

Correlation Coefficient

Qingdao Gon  China Resources

Good diversification

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

Pair Corralation between Qingdao Gon and China Resources

Assuming the 90 days trading horizon Qingdao Gon Technology is expected to generate 1.62 times more return on investment than China Resources. However, Qingdao Gon is 1.62 times more volatile than China Resources Sanjiu. It trades about 0.08 of its potential returns per unit of risk. China Resources Sanjiu is currently generating about -0.09 per unit of risk. If you would invest  2,325  in Qingdao Gon Technology on December 26, 2024 and sell it today you would earn a total of  204.00  from holding Qingdao Gon Technology or generate 8.77% return on investment over 90 days.

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

Qingdao Gon Technology  vs.  China Resources Sanjiu

Qingdao Gon Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Qingdao Gon Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Qingdao Gon may actually be approaching a critical reversion point that can send shares even higher in April 2025.

China Resources Sanjiu

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Resources Sanjiu has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Qingdao Gon and China Resources

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

The idea behind Qingdao Gon Technology and China Resources Sanjiu 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.