Correlation Between Jiangsu Yueda and Hangzhou Gisway

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

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

Diversification Opportunities for Jiangsu Yueda and Hangzhou Gisway

0.39

Correlation Coefficient

Jiangsu Yueda  Hangzhou Gisway

Weak diversification

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

Pair Corralation between Jiangsu Yueda and Hangzhou Gisway

Assuming the 90 days trading horizon Jiangsu Yueda Investment is expected to generate 0.67 times more return on investment than Hangzhou Gisway. However, Jiangsu Yueda Investment is 1.49 times less risky than Hangzhou Gisway. It trades about 0.01 of its potential returns per unit of risk. Hangzhou Gisway Information is currently generating about 0.0 per unit of risk. If you would invest  457.00  in Jiangsu Yueda Investment on October 11, 2024 and sell it today you would lose (22.00) from holding Jiangsu Yueda Investment or give up 4.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	85.95%
Values	Daily Returns

Jiangsu Yueda Investment  vs.  Hangzhou Gisway Information

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.

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.

Pair Trading with Jiangsu Yueda and Hangzhou Gisway

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

The idea behind Jiangsu Yueda Investment and Hangzhou Gisway Information 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.