Correlation Between G Bits and Shenzhen Silver

Can any of the company-specific risk be diversified away by investing in both G Bits and Shenzhen Silver 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 Shenzhen Silver 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 Shenzhen Silver Basis, you can compare the effects of market volatilities on G Bits and Shenzhen Silver 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 Shenzhen Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Bits and Shenzhen Silver.

Diversification Opportunities for G Bits and Shenzhen Silver

-0.16

Correlation Coefficient

G Bits  Shenzhen Silver

Good diversification

The 3 months correlation between 603444 and Shenzhen is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding G bits Network Technology and Shenzhen Silver Basis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Silver Basis 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 Shenzhen Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Silver Basis has no effect on the direction of G Bits i.e., G Bits and Shenzhen Silver go up and down completely randomly.

Pair Corralation between G Bits and Shenzhen Silver

Assuming the 90 days trading horizon G bits Network Technology is expected to generate 1.25 times more return on investment than Shenzhen Silver. However, G Bits is 1.25 times more volatile than Shenzhen Silver Basis. It trades about 0.01 of its potential returns per unit of risk. Shenzhen Silver Basis is currently generating about -0.74 per unit of risk. If you would invest  20,695  in G bits Network Technology on October 6, 2024 and sell it today you would lose (25.00) from holding G bits Network Technology or give up 0.12% of portfolio value over 90 days.

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

G bits Network Technology  vs.  Shenzhen Silver Basis

G bits Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G bits Network Technology 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Shenzhen Silver Basis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shenzhen Silver Basis 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with G Bits and Shenzhen Silver

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

The idea behind G bits Network Technology and Shenzhen Silver Basis 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..