Correlation Between Guangxi Guiguan and Offcn Education

Can any of the company-specific risk be diversified away by investing in both Guangxi Guiguan and Offcn Education 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 Guangxi Guiguan and Offcn Education into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guangxi Guiguan Electric and Offcn Education Technology, you can compare the effects of market volatilities on Guangxi Guiguan and Offcn Education 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 Guangxi Guiguan with a short position of Offcn Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangxi Guiguan and Offcn Education.

Diversification Opportunities for Guangxi Guiguan and Offcn Education

0.75

Correlation Coefficient

Guangxi Guiguan  Offcn Education

Poor diversification

The 3 months correlation between Guangxi and Offcn is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Guangxi Guiguan Electric and Offcn Education Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Offcn Education Tech and Guangxi Guiguan 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 Guangxi Guiguan Electric are associated (or correlated) with Offcn Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Offcn Education Tech has no effect on the direction of Guangxi Guiguan i.e., Guangxi Guiguan and Offcn Education go up and down completely randomly.

Pair Corralation between Guangxi Guiguan and Offcn Education

Assuming the 90 days trading horizon Guangxi Guiguan is expected to generate 4.71 times less return on investment than Offcn Education. But when comparing it to its historical volatility, Guangxi Guiguan Electric is 3.02 times less risky than Offcn Education. It trades about 0.02 of its potential returns per unit of risk. Offcn Education Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  314.00  in Offcn Education Technology on October 24, 2024 and sell it today you would earn a total of  14.00  from holding Offcn Education Technology or generate 4.46% return on investment over 90 days.

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

Guangxi Guiguan Electric  vs.  Offcn Education Technology

Guangxi Guiguan Electric

Risk-Adjusted Performance

1 of 100

Weak

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

Offcn Education Tech

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Offcn Education Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Offcn Education may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Guangxi Guiguan and Offcn Education

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

The idea behind Guangxi Guiguan Electric and Offcn Education Technology 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.