Correlation Between Kunshan Guoli and Tianjin Silvery

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Kunshan Guoli and Tianjin Silvery 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 Kunshan Guoli and Tianjin Silvery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kunshan Guoli Electronic and Tianjin Silvery Dragon, you can compare the effects of market volatilities on Kunshan Guoli and Tianjin Silvery 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 Kunshan Guoli with a short position of Tianjin Silvery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kunshan Guoli and Tianjin Silvery.

Diversification Opportunities for Kunshan Guoli and Tianjin Silvery

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Kunshan and Tianjin is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Kunshan Guoli Electronic and Tianjin Silvery Dragon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Silvery Dragon and Kunshan Guoli 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 Kunshan Guoli Electronic are associated (or correlated) with Tianjin Silvery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Silvery Dragon has no effect on the direction of Kunshan Guoli i.e., Kunshan Guoli and Tianjin Silvery go up and down completely randomly.

Pair Corralation between Kunshan Guoli and Tianjin Silvery

Assuming the 90 days trading horizon Kunshan Guoli Electronic is expected to under-perform the Tianjin Silvery. In addition to that, Kunshan Guoli is 1.48 times more volatile than Tianjin Silvery Dragon. It trades about 0.0 of its total potential returns per unit of risk. Tianjin Silvery Dragon is currently generating about 0.03 per unit of volatility. If you would invest  471.00  in Tianjin Silvery Dragon on September 12, 2024 and sell it today you would earn a total of  135.00  from holding Tianjin Silvery Dragon or generate 28.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Kunshan Guoli Electronic  vs.  Tianjin Silvery Dragon

 Performance 
       Timeline  
Kunshan Guoli Electronic 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Kunshan Guoli Electronic are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kunshan Guoli sustained solid returns over the last few months and may actually be approaching a breakup point.
Tianjin Silvery Dragon 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Tianjin Silvery Dragon are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tianjin Silvery sustained solid returns over the last few months and may actually be approaching a breakup point.

Kunshan Guoli and Tianjin Silvery Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kunshan Guoli and Tianjin Silvery

The main advantage of trading using opposite Kunshan Guoli and Tianjin Silvery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kunshan Guoli position performs unexpectedly, Tianjin Silvery 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 Tianjin Silvery will offset losses from the drop in Tianjin Silvery's long position.
The idea behind Kunshan Guoli Electronic and Tianjin Silvery Dragon 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

Other Complementary Tools

Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Equity Valuation
Check real value of public entities based on technical and fundamental data
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Insider Screener
Find insiders across different sectors to evaluate their impact on performance