Correlation Between G Bits and Shanghai Yaoji

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

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

Diversification Opportunities for G Bits and Shanghai Yaoji

0.41

Correlation Coefficient

G Bits  Shanghai Yaoji

Very weak diversification

The 3 months correlation between 603444 and Shanghai is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding G bits Network Technology and Shanghai Yaoji Playing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yaoji Playing and G Bits 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 G bits Network Technology are associated (or correlated) with Shanghai Yaoji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yaoji Playing has no effect on the direction of G Bits i.e., G Bits and Shanghai Yaoji go up and down completely randomly.

Pair Corralation between G Bits and Shanghai Yaoji

Assuming the 90 days trading horizon G bits Network Technology is expected to under-perform the Shanghai Yaoji. But the stock apears to be less risky and, when comparing its historical volatility, G bits Network Technology is 1.21 times less risky than Shanghai Yaoji. The stock trades about -0.03 of its potential returns per unit of risk. The Shanghai Yaoji Playing is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,746  in Shanghai Yaoji Playing on September 4, 2024 and sell it today you would earn a total of  373.00  from holding Shanghai Yaoji Playing or generate 13.58% return on investment over 90 days.

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

G bits Network Technology  vs.  Shanghai Yaoji Playing

G bits Network

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in G bits Network Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, G Bits may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Shanghai Yaoji Playing

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Shanghai Yaoji Playing are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shanghai Yaoji sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G Bits and Shanghai Yaoji

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

The idea behind G bits Network Technology and Shanghai Yaoji Playing 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.