Correlation Between FlexShares STOXX and Guinness Atkinson

Can any of the company-specific risk be diversified away by investing in both FlexShares STOXX and Guinness Atkinson 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 FlexShares STOXX and Guinness Atkinson into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FlexShares STOXX ESG and Guinness Atkinson Asset, you can compare the effects of market volatilities on FlexShares STOXX and Guinness Atkinson 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 FlexShares STOXX with a short position of Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShares STOXX and Guinness Atkinson.

Diversification Opportunities for FlexShares STOXX and Guinness Atkinson

0.2

Correlation Coefficient

FlexShares STOXX  Guinness Atkinson

Modest diversification

The 3 months correlation between FlexShares and Guinness is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares STOXX ESG and Guinness Atkinson Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Asset and FlexShares STOXX 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 FlexShares STOXX ESG are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Asset has no effect on the direction of FlexShares STOXX i.e., FlexShares STOXX and Guinness Atkinson go up and down completely randomly.

Pair Corralation between FlexShares STOXX and Guinness Atkinson

If you would invest  1,538  in Guinness Atkinson Asset on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Guinness Atkinson Asset or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

FlexShares STOXX ESG  vs.  Guinness Atkinson Asset

FlexShares STOXX ESG

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FlexShares STOXX ESG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, FlexShares STOXX is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Guinness Atkinson Asset

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Guinness Atkinson Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Guinness Atkinson is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with FlexShares STOXX and Guinness Atkinson

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

The idea behind FlexShares STOXX ESG and Guinness Atkinson Asset 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 Transaction History module to view history of all your transactions and understand their impact on performance.