Correlation Between Guangdong Silvere and Ziel Home

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

Diversification Opportunities for Guangdong Silvere and Ziel Home

GuangdongZielDiversified AwayGuangdongZielDiversified Away100%
0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Guangdong and Ziel is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Silvere Sci and Ziel Home Furnishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ziel Home Furnishing and Guangdong Silvere 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 Guangdong Silvere Sci are associated (or correlated) with Ziel Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ziel Home Furnishing has no effect on the direction of Guangdong Silvere i.e., Guangdong Silvere and Ziel Home go up and down completely randomly.

Pair Corralation between Guangdong Silvere and Ziel Home

Assuming the 90 days trading horizon Guangdong Silvere Sci is expected to generate 1.07 times more return on investment than Ziel Home. However, Guangdong Silvere is 1.07 times more volatile than Ziel Home Furnishing. It trades about 0.06 of its potential returns per unit of risk. Ziel Home Furnishing is currently generating about -0.02 per unit of risk. If you would invest  626.00  in Guangdong Silvere Sci on November 20, 2024 and sell it today you would earn a total of  47.00  from holding Guangdong Silvere Sci or generate 7.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Guangdong Silvere Sci  vs.  Ziel Home Furnishing

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-50510
JavaScript chart by amCharts 3.21.15300221 301376
       Timeline  
Guangdong Silvere Sci 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Guangdong Silvere Sci are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guangdong Silvere may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5.566.57
Ziel Home Furnishing 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ziel Home Furnishing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ziel Home is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb181920212223

Guangdong Silvere and Ziel Home Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.86-6.63-4.41-2.19-0.03712.144.396.648.8911.14 0.010.020.030.040.050.06
JavaScript chart by amCharts 3.21.15300221 301376
       Returns  

Pair Trading with Guangdong Silvere and Ziel Home

The main advantage of trading using opposite Guangdong Silvere and Ziel Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Silvere position performs unexpectedly, Ziel Home 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 Ziel Home will offset losses from the drop in Ziel Home's long position.
The idea behind Guangdong Silvere Sci and Ziel Home Furnishing 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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