Correlation Between Guinness Atkinson and SmartETFs Smart

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

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

Diversification Opportunities for Guinness Atkinson and SmartETFs Smart

0.51

Correlation Coefficient

Guinness Atkinson  SmartETFs Smart

Very weak diversification

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

Pair Corralation between Guinness Atkinson and SmartETFs Smart

Given the investment horizon of 90 days Guinness Atkinson is expected to generate 1.04 times less return on investment than SmartETFs Smart. In addition to that, Guinness Atkinson is 1.09 times more volatile than SmartETFs Smart Transportation. It trades about 0.04 of its total potential returns per unit of risk. SmartETFs Smart Transportation is currently generating about 0.05 per unit of volatility. If you would invest  3,342  in SmartETFs Smart Transportation on September 17, 2024 and sell it today you would earn a total of  1,027  from holding SmartETFs Smart Transportation or generate 30.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.15%
Values	Daily Returns

Guinness Atkinson Asset  vs.  SmartETFs Smart Transportation

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.

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 latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Guinness Atkinson and SmartETFs Smart

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

The idea behind Guinness Atkinson Asset and SmartETFs Smart Transportation 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.