Correlation Between Hainan Haiqi and G Bits

Can any of the company-specific risk be diversified away by investing in both Hainan Haiqi and G Bits 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 Hainan Haiqi and G Bits into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hainan Haiqi Transportation and G bits Network Technology, you can compare the effects of market volatilities on Hainan Haiqi and G Bits 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 Hainan Haiqi with a short position of G Bits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Haiqi and G Bits.

Diversification Opportunities for Hainan Haiqi and G Bits

-0.04

Correlation Coefficient

Hainan Haiqi  G Bits

Good diversification

The 3 months correlation between Hainan and 603444 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Haiqi Transportation and G bits Network Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G bits Network and Hainan Haiqi 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 Hainan Haiqi Transportation are associated (or correlated) with G Bits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G bits Network has no effect on the direction of Hainan Haiqi i.e., Hainan Haiqi and G Bits go up and down completely randomly.

Pair Corralation between Hainan Haiqi and G Bits

Assuming the 90 days trading horizon Hainan Haiqi Transportation is expected to under-perform the G Bits. In addition to that, Hainan Haiqi is 1.16 times more volatile than G bits Network Technology. It trades about -0.12 of its total potential returns per unit of risk. G bits Network Technology is currently generating about 0.03 per unit of volatility. If you would invest  21,008  in G bits Network Technology on December 2, 2024 and sell it today you would earn a total of  395.00  from holding G bits Network Technology or generate 1.88% return on investment over 90 days.

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

Hainan Haiqi Transportation  vs.  G bits Network Technology

Hainan Haiqi Transpo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hainan Haiqi Transportation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

G bits Network

Risk-Adjusted Performance

Weak

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

Pair Trading with Hainan Haiqi and G Bits

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

The idea behind Hainan Haiqi Transportation and G bits Network 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.