Correlation Between Grandblue Environment and Beijing Roborock

Can any of the company-specific risk be diversified away by investing in both Grandblue Environment and Beijing Roborock 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 Grandblue Environment and Beijing Roborock into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grandblue Environment Co and Beijing Roborock Technology, you can compare the effects of market volatilities on Grandblue Environment and Beijing Roborock 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 Grandblue Environment with a short position of Beijing Roborock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grandblue Environment and Beijing Roborock.

Diversification Opportunities for Grandblue Environment and Beijing Roborock

0.14

Correlation Coefficient

Grandblue Environment  Beijing Roborock

Average diversification

The 3 months correlation between Grandblue and Beijing is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Grandblue Environment Co and Beijing Roborock Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Roborock Tec and Grandblue Environment 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 Grandblue Environment Co are associated (or correlated) with Beijing Roborock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Roborock Tec has no effect on the direction of Grandblue Environment i.e., Grandblue Environment and Beijing Roborock go up and down completely randomly.

Pair Corralation between Grandblue Environment and Beijing Roborock

Assuming the 90 days trading horizon Grandblue Environment Co is expected to generate 0.61 times more return on investment than Beijing Roborock. However, Grandblue Environment Co is 1.63 times less risky than Beijing Roborock. It trades about 0.26 of its potential returns per unit of risk. Beijing Roborock Technology is currently generating about 0.16 per unit of risk. If you would invest  2,144  in Grandblue Environment Co on September 27, 2024 and sell it today you would earn a total of  174.00  from holding Grandblue Environment Co or generate 8.12% return on investment over 90 days.

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

Grandblue Environment Co  vs.  Beijing Roborock Technology

Grandblue Environment

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grandblue Environment Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grandblue Environment sustained solid returns over the last few months and may actually be approaching a breakup point.

Beijing Roborock Tec

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Grandblue Environment and Beijing Roborock

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

The idea behind Grandblue Environment Co and Beijing Roborock 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.