Correlation Between Guangdong Investment and Onconetix

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

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

Diversification Opportunities for Guangdong Investment and Onconetix

-0.14

Correlation Coefficient

Guangdong Investment  Onconetix

Good diversification

The 3 months correlation between Guangdong and Onconetix is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and Onconetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onconetix and Guangdong Investment 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 Guangdong Investment Limited are associated (or correlated) with Onconetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onconetix has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and Onconetix go up and down completely randomly.

Pair Corralation between Guangdong Investment and Onconetix

Assuming the 90 days horizon Guangdong Investment Limited is expected to generate 0.65 times more return on investment than Onconetix. However, Guangdong Investment Limited is 1.54 times less risky than Onconetix. It trades about 0.03 of its potential returns per unit of risk. Onconetix is currently generating about -0.03 per unit of risk. If you would invest  116.00  in Guangdong Investment Limited on October 10, 2024 and sell it today you would lose (36.00) from holding Guangdong Investment Limited or give up 31.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.38%
Values	Daily Returns

Guangdong Investment Limited  vs.  Onconetix

Guangdong Investment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guangdong Investment Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Guangdong Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Onconetix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Onconetix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Guangdong Investment and Onconetix

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

The idea behind Guangdong Investment Limited and Onconetix 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.

Check out your portfolio center.

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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.