Correlation Between Guangzhou Haozhi and Cicc Fund

Can any of the company-specific risk be diversified away by investing in both Guangzhou Haozhi and Cicc Fund 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 Haozhi and Cicc Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guangzhou Haozhi Industrial and Cicc Fund Management, you can compare the effects of market volatilities on Guangzhou Haozhi and Cicc Fund 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 Haozhi with a short position of Cicc Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haozhi and Cicc Fund.

Diversification Opportunities for Guangzhou Haozhi and Cicc Fund

0.55

Correlation Coefficient

Guangzhou Haozhi  Cicc Fund

Very weak diversification

The 3 months correlation between Guangzhou and Cicc is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haozhi Industrial and Cicc Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cicc Fund Management and Guangzhou Haozhi 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 Haozhi Industrial are associated (or correlated) with Cicc Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cicc Fund Management has no effect on the direction of Guangzhou Haozhi i.e., Guangzhou Haozhi and Cicc Fund go up and down completely randomly.

Pair Corralation between Guangzhou Haozhi and Cicc Fund

Assuming the 90 days trading horizon Guangzhou Haozhi Industrial is expected to generate 4.16 times more return on investment than Cicc Fund. However, Guangzhou Haozhi is 4.16 times more volatile than Cicc Fund Management. It trades about 0.11 of its potential returns per unit of risk. Cicc Fund Management is currently generating about 0.2 per unit of risk. If you would invest  2,108  in Guangzhou Haozhi Industrial on December 24, 2024 and sell it today you would earn a total of  537.00  from holding Guangzhou Haozhi Industrial or generate 25.47% return on investment over 90 days.

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

Guangzhou Haozhi Industrial  vs.  Cicc Fund Management

Guangzhou Haozhi Ind

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guangzhou Haozhi Industrial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guangzhou Haozhi sustained solid returns over the last few months and may actually be approaching a breakup point.

Cicc Fund Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cicc Fund Management are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cicc Fund may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Guangzhou Haozhi and Cicc Fund

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

The idea behind Guangzhou Haozhi Industrial and Cicc Fund Management 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.