Correlation Between Hangzhou Gisway and Suzhou Novoprotein

Can any of the company-specific risk be diversified away by investing in both Hangzhou Gisway and Suzhou Novoprotein 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 Suzhou Novoprotein 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 Suzhou Novoprotein Scientific, you can compare the effects of market volatilities on Hangzhou Gisway and Suzhou Novoprotein 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 Suzhou Novoprotein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Gisway and Suzhou Novoprotein.

Diversification Opportunities for Hangzhou Gisway and Suzhou Novoprotein

0.15

Correlation Coefficient

Hangzhou Gisway  Suzhou Novoprotein

Average diversification

The 3 months correlation between Hangzhou and Suzhou is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Gisway Information and Suzhou Novoprotein Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Novoprotein 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 Suzhou Novoprotein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Novoprotein has no effect on the direction of Hangzhou Gisway i.e., Hangzhou Gisway and Suzhou Novoprotein go up and down completely randomly.

Pair Corralation between Hangzhou Gisway and Suzhou Novoprotein

Assuming the 90 days trading horizon Hangzhou Gisway Information is expected to generate 2.18 times more return on investment than Suzhou Novoprotein. However, Hangzhou Gisway is 2.18 times more volatile than Suzhou Novoprotein Scientific. It trades about 0.01 of its potential returns per unit of risk. Suzhou Novoprotein Scientific is currently generating about -0.07 per unit of risk. If you would invest  3,188  in Hangzhou Gisway Information on October 23, 2024 and sell it today you would lose (49.00) from holding Hangzhou Gisway Information or give up 1.54% of portfolio value over 90 days.

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

Hangzhou Gisway Information  vs.  Suzhou Novoprotein Scientific

Hangzhou Gisway Info

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hangzhou Gisway Information are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Hangzhou Gisway is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Suzhou Novoprotein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Suzhou Novoprotein Scientific has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Hangzhou Gisway and Suzhou Novoprotein

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

The idea behind Hangzhou Gisway Information and Suzhou Novoprotein Scientific 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.