Correlation Between Shenzhen Silver and G Bits

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

By analyzing existing cross correlation between Shenzhen Silver Basis and G bits Network Technology, you can compare the effects of market volatilities on Shenzhen Silver and G Bits 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 Shenzhen Silver with a short position of G Bits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Silver and G Bits.

Diversification Opportunities for Shenzhen Silver and G Bits

-0.14

Correlation Coefficient

Shenzhen Silver  G Bits

Good diversification

The 3 months correlation between Shenzhen and 603444 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Silver Basis and G bits Network Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G bits Network and Shenzhen Silver 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 Shenzhen Silver Basis are associated (or correlated) with G Bits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G bits Network has no effect on the direction of Shenzhen Silver i.e., Shenzhen Silver and G Bits go up and down completely randomly.

Pair Corralation between Shenzhen Silver and G Bits

Assuming the 90 days trading horizon Shenzhen Silver Basis is expected to under-perform the G Bits. In addition to that, Shenzhen Silver is 1.38 times more volatile than G bits Network Technology. It trades about -0.01 of its total potential returns per unit of risk. G bits Network Technology is currently generating about 0.05 per unit of volatility. If you would invest  16,899  in G bits Network Technology on October 9, 2024 and sell it today you would earn a total of  3,829  from holding G bits Network Technology or generate 22.66% return on investment over 90 days.

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

Shenzhen Silver Basis  vs.  G bits Network Technology

Shenzhen Silver Basis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shenzhen Silver Basis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

G bits Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G bits Network Technology 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 Shenzhen Silver and G Bits

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

The idea behind Shenzhen Silver Basis and G bits Network Technology 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.