Correlation Between Guinness Atkinson and Williston Basin/mid-north

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

By analyzing existing cross correlation between Guinness Atkinson Global and Williston Basinmid North America, you can compare the effects of market volatilities on Guinness Atkinson and Williston Basin/mid-north 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 Guinness Atkinson with a short position of Williston Basin/mid-north. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guinness Atkinson and Williston Basin/mid-north.

Diversification Opportunities for Guinness Atkinson and Williston Basin/mid-north

0.82

Correlation Coefficient

Guinness Atkinson  Williston Basin/mid-north

Very poor diversification

The 3 months correlation between Guinness and Williston is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guinness Atkinson Global and Williston Basinmid North Ameri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Williston Basin/mid-north and Guinness Atkinson 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 Guinness Atkinson Global are associated (or correlated) with Williston Basin/mid-north. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Williston Basin/mid-north has no effect on the direction of Guinness Atkinson i.e., Guinness Atkinson and Williston Basin/mid-north go up and down completely randomly.

Pair Corralation between Guinness Atkinson and Williston Basin/mid-north

Assuming the 90 days horizon Guinness Atkinson Global is expected to generate 0.64 times more return on investment than Williston Basin/mid-north. However, Guinness Atkinson Global is 1.56 times less risky than Williston Basin/mid-north. It trades about 0.09 of its potential returns per unit of risk. Williston Basinmid North America is currently generating about -0.19 per unit of risk. If you would invest  2,195  in Guinness Atkinson Global on December 4, 2024 and sell it today you would earn a total of  37.00  from holding Guinness Atkinson Global or generate 1.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

Guinness Atkinson Global  vs.  Williston Basinmid North Ameri

Guinness Atkinson Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guinness Atkinson Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Guinness Atkinson is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Williston Basin/mid-north

Risk-Adjusted Performance

Very Weak

Over the last 90 days Williston Basinmid North America has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Williston Basin/mid-north is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guinness Atkinson and Williston Basin/mid-north

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

The idea behind Guinness Atkinson Global and Williston Basinmid North America 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.