Correlation Between G Bits and Xinjiang Daqo

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

Diversification Opportunities for G Bits and Xinjiang Daqo

-0.22

Correlation Coefficient

G Bits  Xinjiang Daqo

Very good diversification

The 3 months correlation between 603444 and Xinjiang is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding G bits Network Technology and Xinjiang Daqo New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Daqo New 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 Xinjiang Daqo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Daqo New has no effect on the direction of G Bits i.e., G Bits and Xinjiang Daqo go up and down completely randomly.

Pair Corralation between G Bits and Xinjiang Daqo

Assuming the 90 days trading horizon G bits Network Technology is expected to generate 0.8 times more return on investment than Xinjiang Daqo. However, G bits Network Technology is 1.24 times less risky than Xinjiang Daqo. It trades about 0.01 of its potential returns per unit of risk. Xinjiang Daqo New is currently generating about -0.01 per unit of risk. If you would invest  21,311  in G bits Network Technology on October 9, 2024 and sell it today you would lose (452.00) from holding G bits Network Technology or give up 2.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.58%
Values	Daily Returns

G bits Network Technology  vs.  Xinjiang Daqo New

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Xinjiang Daqo New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xinjiang Daqo New has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with G Bits and Xinjiang Daqo

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

The idea behind G bits Network Technology and Xinjiang Daqo New 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.