Correlation Between Guangzhou Jinyi and Keda Clean

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Can any of the company-specific risk be diversified away by investing in both Guangzhou Jinyi and Keda Clean 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 Guangzhou Jinyi and Keda Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangzhou Jinyi Media and Keda Clean Energy, you can compare the effects of market volatilities on Guangzhou Jinyi and Keda Clean 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 Guangzhou Jinyi with a short position of Keda Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Jinyi and Keda Clean.

Diversification Opportunities for Guangzhou Jinyi and Keda Clean

GuangzhouKedaDiversified AwayGuangzhouKedaDiversified Away100%
0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between Guangzhou and Keda is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Jinyi Media and Keda Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keda Clean Energy and Guangzhou Jinyi 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 Guangzhou Jinyi Media are associated (or correlated) with Keda Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keda Clean Energy has no effect on the direction of Guangzhou Jinyi i.e., Guangzhou Jinyi and Keda Clean go up and down completely randomly.

Pair Corralation between Guangzhou Jinyi and Keda Clean

Assuming the 90 days trading horizon Guangzhou Jinyi Media is expected to under-perform the Keda Clean. In addition to that, Guangzhou Jinyi is 3.43 times more volatile than Keda Clean Energy. It trades about -0.06 of its total potential returns per unit of risk. Keda Clean Energy is currently generating about -0.16 per unit of volatility. If you would invest  822.00  in Keda Clean Energy on November 24, 2024 and sell it today you would lose (31.00) from holding Keda Clean Energy or give up 3.77% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Guangzhou Jinyi Media  vs.  Keda Clean Energy

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -100102030
JavaScript chart by amCharts 3.21.15002905 600499
       Timeline  
Guangzhou Jinyi Media 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Guangzhou Jinyi Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Guangzhou Jinyi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.577.588.599.510
Keda Clean Energy 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Keda Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Keda Clean is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7.67.888.28.48.68.8

Guangzhou Jinyi and Keda Clean Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.45-10.08-6.7-3.320.03.426.8410.2613.69 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15002905 600499
       Returns  

Pair Trading with Guangzhou Jinyi and Keda Clean

The main advantage of trading using opposite Guangzhou Jinyi and Keda Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Jinyi position performs unexpectedly, Keda Clean 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 Keda Clean will offset losses from the drop in Keda Clean's long position.
The idea behind Guangzhou Jinyi Media and Keda Clean Energy 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 Transaction History module to view history of all your transactions and understand their impact on performance.

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