Correlation Between SmartETFs Smart and Guinness Atkinson

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

By analyzing existing cross correlation between SmartETFs Smart Transportation and Guinness Atkinson Asset, you can compare the effects of market volatilities on SmartETFs Smart and Guinness Atkinson 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 SmartETFs Smart with a short position of Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of SmartETFs Smart and Guinness Atkinson.

Diversification Opportunities for SmartETFs Smart and Guinness Atkinson

0.51

Correlation Coefficient

SmartETFs Smart  Guinness Atkinson

Very weak diversification

The 3 months correlation between SmartETFs and Guinness is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SmartETFs Smart Transportation and Guinness Atkinson Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Asset and SmartETFs Smart 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 SmartETFs Smart Transportation are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Asset has no effect on the direction of SmartETFs Smart i.e., SmartETFs Smart and Guinness Atkinson go up and down completely randomly.

Pair Corralation between SmartETFs Smart and Guinness Atkinson

Given the investment horizon of 90 days SmartETFs Smart is expected to generate 2.02 times less return on investment than Guinness Atkinson. In addition to that, SmartETFs Smart is 1.33 times more volatile than Guinness Atkinson Asset. It trades about 0.08 of its total potential returns per unit of risk. Guinness Atkinson Asset is currently generating about 0.21 per unit of volatility. If you would invest  1,452  in Guinness Atkinson Asset on September 17, 2024 and sell it today you would earn a total of  86.00  from holding Guinness Atkinson Asset or generate 5.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	54.69%
Values	Daily Returns

SmartETFs Smart Transportation  vs.  Guinness Atkinson Asset

SmartETFs Smart Tran

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SmartETFs Smart Transportation are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, SmartETFs Smart is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Guinness Atkinson Asset

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Guinness Atkinson Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unfluctuating basic indicators, Guinness Atkinson may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SmartETFs Smart and Guinness Atkinson

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

The idea behind SmartETFs Smart Transportation and Guinness Atkinson Asset 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.