Correlation Between Guangdong Investment and MEDCAW INVESTMENTS

Can any of the company-specific risk be diversified away by investing in both Guangdong Investment and MEDCAW INVESTMENTS 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 MEDCAW INVESTMENTS 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 MEDCAW INVESTMENTS LS 01, you can compare the effects of market volatilities on Guangdong Investment and MEDCAW INVESTMENTS 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 MEDCAW INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and MEDCAW INVESTMENTS.

Diversification Opportunities for Guangdong Investment and MEDCAW INVESTMENTS

0.0

Correlation Coefficient

Guangdong Investment  MEDCAW INVESTMENTS

Pay attention - limited upside

The 3 months correlation between Guangdong and MEDCAW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and MEDCAW INVESTMENTS LS 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDCAW INVESTMENTS 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 MEDCAW INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDCAW INVESTMENTS has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and MEDCAW INVESTMENTS go up and down completely randomly.

Pair Corralation between Guangdong Investment and MEDCAW INVESTMENTS

If you would invest  60.00  in Guangdong Investment Limited on October 10, 2024 and sell it today you would earn a total of  18.00  from holding Guangdong Investment Limited or generate 30.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Guangdong Investment Limited  vs.  MEDCAW INVESTMENTS LS 01

Guangdong Investment

Risk-Adjusted Performance

13 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guangdong Investment Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Guangdong Investment reported solid returns over the last few months and may actually be approaching a breakup point.

MEDCAW INVESTMENTS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDCAW INVESTMENTS LS 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MEDCAW INVESTMENTS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Guangdong Investment and MEDCAW INVESTMENTS

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

The idea behind Guangdong Investment Limited and MEDCAW INVESTMENTS LS 01 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.