Correlation Between Qingdao Gon and Ye Chiu

Can any of the company-specific risk be diversified away by investing in both Qingdao Gon and Ye Chiu 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 Ye Chiu 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 Ye Chiu Metal, you can compare the effects of market volatilities on Qingdao Gon and Ye Chiu 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 Ye Chiu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Gon and Ye Chiu.

Diversification Opportunities for Qingdao Gon and Ye Chiu

0.29

Correlation Coefficient

Qingdao Gon  Ye Chiu

Modest diversification

The 3 months correlation between Qingdao and 601388 is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Gon Technology and Ye Chiu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ye Chiu Metal 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 Ye Chiu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ye Chiu Metal has no effect on the direction of Qingdao Gon i.e., Qingdao Gon and Ye Chiu go up and down completely randomly.

Pair Corralation between Qingdao Gon and Ye Chiu

Assuming the 90 days trading horizon Qingdao Gon Technology is expected to generate 1.2 times more return on investment than Ye Chiu. However, Qingdao Gon is 1.2 times more volatile than Ye Chiu Metal. It trades about 0.08 of its potential returns per unit of risk. Ye Chiu Metal is currently generating about 0.02 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Qingdao Gon Technology  vs.  Ye Chiu Metal

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.

Ye Chiu Metal

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ye Chiu Metal are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Ye Chiu is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Qingdao Gon and Ye Chiu

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

The idea behind Qingdao Gon Technology and Ye Chiu Metal 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.