Correlation Between Guangzhou Jinyi and Flat Glass

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Can any of the company-specific risk be diversified away by investing in both Guangzhou Jinyi and Flat Glass 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 Jinyi and Flat Glass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangzhou Jinyi Media and Flat Glass Group, you can compare the effects of market volatilities on Guangzhou Jinyi and Flat Glass 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 Jinyi with a short position of Flat Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Jinyi and Flat Glass.

Diversification Opportunities for Guangzhou Jinyi and Flat Glass

0.19
  Correlation Coefficient

Average diversification

The 3 months correlation between Guangzhou and Flat is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Jinyi Media and Flat Glass Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flat Glass Group and Guangzhou Jinyi 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 Jinyi Media are associated (or correlated) with Flat Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flat Glass Group has no effect on the direction of Guangzhou Jinyi i.e., Guangzhou Jinyi and Flat Glass go up and down completely randomly.

Pair Corralation between Guangzhou Jinyi and Flat Glass

Assuming the 90 days trading horizon Guangzhou Jinyi Media is expected to generate 1.64 times more return on investment than Flat Glass. However, Guangzhou Jinyi is 1.64 times more volatile than Flat Glass Group. It trades about 0.04 of its potential returns per unit of risk. Flat Glass Group is currently generating about -0.27 per unit of risk. If you would invest  696.00  in Guangzhou Jinyi Media on October 9, 2024 and sell it today you would earn a total of  20.00  from holding Guangzhou Jinyi Media or generate 2.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy97.62%
ValuesDaily Returns

Guangzhou Jinyi Media  vs.  Flat Glass Group

 Performance 
       Timeline  
Guangzhou Jinyi Media 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Guangzhou Jinyi Media are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guangzhou Jinyi sustained solid returns over the last few months and may actually be approaching a breakup point.
Flat Glass Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Flat Glass Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Flat Glass is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guangzhou Jinyi and Flat Glass Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Guangzhou Jinyi and Flat Glass

The main advantage of trading using opposite Guangzhou Jinyi and Flat Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Jinyi position performs unexpectedly, Flat Glass 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 Flat Glass will offset losses from the drop in Flat Glass' long position.
The idea behind Guangzhou Jinyi Media and Flat Glass Group 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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