Correlation Between Olympic Circuit and Guangdong Cellwise

Can any of the company-specific risk be diversified away by investing in both Olympic Circuit and Guangdong Cellwise 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 Olympic Circuit and Guangdong Cellwise into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Olympic Circuit Technology and Guangdong Cellwise Microelectronics, you can compare the effects of market volatilities on Olympic Circuit and Guangdong Cellwise 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 Olympic Circuit with a short position of Guangdong Cellwise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympic Circuit and Guangdong Cellwise.

Diversification Opportunities for Olympic Circuit and Guangdong Cellwise

0.59

Correlation Coefficient

Olympic Circuit  Guangdong Cellwise

Very weak diversification

The 3 months correlation between Olympic and Guangdong is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Olympic Circuit Technology and Guangdong Cellwise Microelectr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Cellwise and Olympic Circuit 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 Olympic Circuit Technology are associated (or correlated) with Guangdong Cellwise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Cellwise has no effect on the direction of Olympic Circuit i.e., Olympic Circuit and Guangdong Cellwise go up and down completely randomly.

Pair Corralation between Olympic Circuit and Guangdong Cellwise

Assuming the 90 days trading horizon Olympic Circuit Technology is expected to generate 1.08 times more return on investment than Guangdong Cellwise. However, Olympic Circuit is 1.08 times more volatile than Guangdong Cellwise Microelectronics. It trades about 0.13 of its potential returns per unit of risk. Guangdong Cellwise Microelectronics is currently generating about -0.11 per unit of risk. If you would invest  3,073  in Olympic Circuit Technology on October 17, 2024 and sell it today you would earn a total of  298.00  from holding Olympic Circuit Technology or generate 9.7% return on investment over 90 days.

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

Olympic Circuit Technology  vs.  Guangdong Cellwise Microelectr

Olympic Circuit Tech

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Olympic Circuit Technology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Olympic Circuit sustained solid returns over the last few months and may actually be approaching a breakup point.

Guangdong Cellwise

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Olympic Circuit and Guangdong Cellwise

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

The idea behind Olympic Circuit Technology and Guangdong Cellwise Microelectronics 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.