Correlation Between Epoxy Base and Hangzhou Gisway

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

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

Diversification Opportunities for Epoxy Base and Hangzhou Gisway

0.32

Correlation Coefficient

Epoxy Base  Hangzhou Gisway

Weak diversification

The 3 months correlation between Epoxy and Hangzhou is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Epoxy Base Electronic 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 Epoxy Base 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 Epoxy Base Electronic 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 Epoxy Base i.e., Epoxy Base and Hangzhou Gisway go up and down completely randomly.

Pair Corralation between Epoxy Base and Hangzhou Gisway

Assuming the 90 days trading horizon Epoxy Base Electronic is expected to generate 1.04 times more return on investment than Hangzhou Gisway. However, Epoxy Base is 1.04 times more volatile than Hangzhou Gisway Information. It trades about 0.04 of its potential returns per unit of risk. Hangzhou Gisway Information is currently generating about 0.03 per unit of risk. If you would invest  591.00  in Epoxy Base Electronic on December 1, 2024 and sell it today you would earn a total of  28.00  from holding Epoxy Base Electronic or generate 4.74% return on investment over 90 days.

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

Epoxy Base Electronic  vs.  Hangzhou Gisway Information

Epoxy Base Electronic

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Epoxy Base Electronic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Epoxy Base may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Hangzhou Gisway Info

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hangzhou Gisway Information are ranked lower than 2 (%) 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 April 2025.

Pair Trading with Epoxy Base and Hangzhou Gisway

The main advantage of trading using opposite Epoxy Base and Hangzhou Gisway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epoxy Base 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 Epoxy Base Electronic 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.