Correlation Between Guandao Puer and Manitou BF

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

Diversification Opportunities for Guandao Puer and Manitou BF

0.0

Correlation Coefficient

Guandao Puer  Manitou BF

Pay attention - limited upside

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

Pair Corralation between Guandao Puer and Manitou BF

If you would invest  45.00  in Guandao Puer Investment on October 20, 2024 and sell it today you would earn a total of  0.00  from holding Guandao Puer Investment or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.55%
Values	Daily Returns

Guandao Puer Investment  vs.  Manitou BF 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.

Manitou BF SA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Manitou BF SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Manitou BF may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Guandao Puer and Manitou BF

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

The idea behind Guandao Puer Investment and Manitou BF 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.