Correlation Between Guandao Puer and Blockchain Group

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

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

Diversification Opportunities for Guandao Puer and Blockchain Group

0.0

Correlation Coefficient

Guandao Puer  Blockchain Group

Pay attention - limited upside

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

Pair Corralation between Guandao Puer and Blockchain Group

If you would invest  42.00  in Blockchain Group SA on October 5, 2024 and sell it today you would lose (10.00) from holding Blockchain Group SA or give up 23.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.63%
Values	Daily Returns

Guandao Puer Investment  vs.  Blockchain Group SA

Guandao Puer Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guandao Puer Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Guandao Puer is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Blockchain Group

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blockchain Group SA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Blockchain Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guandao Puer and Blockchain Group

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

The idea behind Guandao Puer Investment and Blockchain Group SA 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.