Correlation Between Guangdong Investment and FIH MOBILE

Can any of the company-specific risk be diversified away by investing in both Guangdong Investment and FIH MOBILE 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 FIH MOBILE 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 FIH MOBILE, you can compare the effects of market volatilities on Guangdong Investment and FIH MOBILE 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 FIH MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and FIH MOBILE.

Diversification Opportunities for Guangdong Investment and FIH MOBILE

0.4

Correlation Coefficient

Guangdong Investment  FIH MOBILE

Very weak diversification

The 3 months correlation between Guangdong and FIH is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and FIH MOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIH MOBILE 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 FIH MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIH MOBILE has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and FIH MOBILE go up and down completely randomly.

Pair Corralation between Guangdong Investment and FIH MOBILE

If you would invest  71.00  in Guangdong Investment Limited on December 21, 2024 and sell it today you would earn a total of  2.00  from holding Guangdong Investment Limited or generate 2.82% return on investment over 90 days.

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

Guangdong Investment Limited  vs.  FIH MOBILE

Guangdong Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guangdong Investment Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Guangdong Investment is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

FIH MOBILE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FIH MOBILE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, FIH MOBILE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Guangdong Investment and FIH MOBILE

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

The idea behind Guangdong Investment Limited and FIH MOBILE 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.