Correlation Between Affirm Holdings and China Gas

Can any of the company-specific risk be diversified away by investing in both Affirm Holdings and China Gas 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 Affirm Holdings and China Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Affirm Holdings and China Gas Holdings, you can compare the effects of market volatilities on Affirm Holdings and China Gas 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 Affirm Holdings with a short position of China Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affirm Holdings and China Gas.

Diversification Opportunities for Affirm Holdings and China Gas

-0.46

Correlation Coefficient

Affirm Holdings  China Gas

Very good diversification

The 3 months correlation between Affirm and China is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Affirm Holdings and China Gas Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Gas Holdings and Affirm Holdings 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 Affirm Holdings are associated (or correlated) with China Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Gas Holdings has no effect on the direction of Affirm Holdings i.e., Affirm Holdings and China Gas go up and down completely randomly.

Pair Corralation between Affirm Holdings and China Gas

If you would invest  85.00  in China Gas Holdings on October 9, 2024 and sell it today you would earn a total of  0.00  from holding China Gas Holdings or generate 0.0% return on investment over 90 days.

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

Affirm Holdings  vs.  China Gas Holdings

Affirm Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Affirm Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Affirm Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

China Gas Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in China Gas Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, China Gas may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Affirm Holdings and China Gas

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

The idea behind Affirm Holdings and China Gas Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.