Correlation Between V V and Guangdong Silvere

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

Diversification Opportunities for V V and Guangdong Silvere

0.41
  Correlation Coefficient

Very weak diversification

The 3 months correlation between 600300 and Guangdong is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding V V Food and Guangdong Silvere Sci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Silvere Sci and V V 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 V V Food are associated (or correlated) with Guangdong Silvere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Silvere Sci has no effect on the direction of V V i.e., V V and Guangdong Silvere go up and down completely randomly.

Pair Corralation between V V and Guangdong Silvere

Assuming the 90 days trading horizon V V Food is expected to generate 1.32 times more return on investment than Guangdong Silvere. However, V V is 1.32 times more volatile than Guangdong Silvere Sci. It trades about -0.16 of its potential returns per unit of risk. Guangdong Silvere Sci is currently generating about -0.36 per unit of risk. If you would invest  349.00  in V V Food on October 12, 2024 and sell it today you would lose (49.00) from holding V V Food or give up 14.04% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

V V Food  vs.  Guangdong Silvere Sci

 Performance 
       Timeline  
V V Food 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in V V Food are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V V sustained solid returns over the last few months and may actually be approaching a breakup point.
Guangdong Silvere Sci 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Guangdong Silvere Sci has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Guangdong Silvere is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

V V and Guangdong Silvere Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with V V and Guangdong Silvere

The main advantage of trading using opposite V V and Guangdong Silvere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if V V position performs unexpectedly, Guangdong Silvere 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 Guangdong Silvere will offset losses from the drop in Guangdong Silvere's long position.
The idea behind V V Food and Guangdong Silvere Sci 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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