Correlation Between Guilin Seamild and AVIC UAS

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

Diversification Opportunities for Guilin Seamild and AVIC UAS

GuilinAVICDiversified AwayGuilinAVICDiversified Away100%
0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Guilin and AVIC is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Guilin Seamild Foods and AVIC UAS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVIC UAS and Guilin Seamild 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 Guilin Seamild Foods are associated (or correlated) with AVIC UAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVIC UAS has no effect on the direction of Guilin Seamild i.e., Guilin Seamild and AVIC UAS go up and down completely randomly.

Pair Corralation between Guilin Seamild and AVIC UAS

Assuming the 90 days trading horizon Guilin Seamild Foods is expected to generate 0.53 times more return on investment than AVIC UAS. However, Guilin Seamild Foods is 1.89 times less risky than AVIC UAS. It trades about 0.14 of its potential returns per unit of risk. AVIC UAS Co is currently generating about 0.06 per unit of risk. If you would invest  1,329  in Guilin Seamild Foods on September 30, 2024 and sell it today you would earn a total of  329.00  from holding Guilin Seamild Foods or generate 24.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Guilin Seamild Foods  vs.  AVIC UAS Co

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 20406080
JavaScript chart by amCharts 3.21.15002956 688297
       Timeline  
Guilin Seamild Foods 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Guilin Seamild Foods are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guilin Seamild sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec12131415161718
AVIC UAS 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in AVIC UAS Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AVIC UAS sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec354045505560

Guilin Seamild and AVIC UAS Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.32-6.98-4.64-2.30.02.545.177.7910.4213.05 0.0100.0150.0200.0250.0300.0350.040
JavaScript chart by amCharts 3.21.15002956 688297
       Returns  

Pair Trading with Guilin Seamild and AVIC UAS

The main advantage of trading using opposite Guilin Seamild and AVIC UAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guilin Seamild position performs unexpectedly, AVIC UAS 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 AVIC UAS will offset losses from the drop in AVIC UAS's long position.
The idea behind Guilin Seamild Foods and AVIC UAS 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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