Correlation Between Hangzhou Gisway and Jiangsu Yueda

Can any of the company-specific risk be diversified away by investing in both Hangzhou Gisway and Jiangsu Yueda 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 Hangzhou Gisway and Jiangsu Yueda into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hangzhou Gisway Information and Jiangsu Yueda Investment, you can compare the effects of market volatilities on Hangzhou Gisway and Jiangsu Yueda 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 Hangzhou Gisway with a short position of Jiangsu Yueda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Gisway and Jiangsu Yueda.

Diversification Opportunities for Hangzhou Gisway and Jiangsu Yueda

0.39

Correlation Coefficient

Hangzhou Gisway  Jiangsu Yueda

Weak diversification

The 3 months correlation between Hangzhou and Jiangsu is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Gisway Information and Jiangsu Yueda Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Yueda Investment and Hangzhou Gisway 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 Hangzhou Gisway Information are associated (or correlated) with Jiangsu Yueda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Yueda Investment has no effect on the direction of Hangzhou Gisway i.e., Hangzhou Gisway and Jiangsu Yueda go up and down completely randomly.

Pair Corralation between Hangzhou Gisway and Jiangsu Yueda

Assuming the 90 days trading horizon Hangzhou Gisway Information is expected to generate 2.46 times more return on investment than Jiangsu Yueda. However, Hangzhou Gisway is 2.46 times more volatile than Jiangsu Yueda Investment. It trades about -0.02 of its potential returns per unit of risk. Jiangsu Yueda Investment is currently generating about -0.2 per unit of risk. If you would invest  3,371  in Hangzhou Gisway Information on October 11, 2024 and sell it today you would lose (206.00) from holding Hangzhou Gisway Information or give up 6.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Hangzhou Gisway Information  vs.  Jiangsu Yueda Investment

Hangzhou Gisway Info

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hangzhou Gisway Information are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hangzhou Gisway may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Jiangsu Yueda Investment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jiangsu Yueda Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiangsu Yueda may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hangzhou Gisway and Jiangsu Yueda

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

The idea behind Hangzhou Gisway Information and Jiangsu Yueda Investment 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.