Correlation Between Artesian Resources and Guangdong Investment
Can any of the company-specific risk be diversified away by investing in both Artesian Resources and Guangdong Investment 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 Artesian Resources and Guangdong Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artesian Resources and Guangdong Investment Limited, you can compare the effects of market volatilities on Artesian Resources and Guangdong Investment 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 Artesian Resources with a short position of Guangdong Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artesian Resources and Guangdong Investment.
Diversification Opportunities for Artesian Resources and Guangdong Investment
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Artesian and Guangdong is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Artesian Resources and Guangdong Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Investment and Artesian Resources 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 Artesian Resources are associated (or correlated) with Guangdong Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Investment has no effect on the direction of Artesian Resources i.e., Artesian Resources and Guangdong Investment go up and down completely randomly.
Pair Corralation between Artesian Resources and Guangdong Investment
Assuming the 90 days horizon Artesian Resources is expected to generate 4.31 times less return on investment than Guangdong Investment. But when comparing it to its historical volatility, Artesian Resources is 1.66 times less risky than Guangdong Investment. It trades about 0.01 of its potential returns per unit of risk. Guangdong Investment Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 60.00 in Guangdong Investment Limited on September 5, 2024 and sell it today you would earn a total of 1.00 from holding Guangdong Investment Limited or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Artesian Resources vs. Guangdong Investment Limited
Performance |
| Timeline |
| Artesian Resources |
| Guangdong Investment |
Artesian Resources and Guangdong Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artesian Resources and Guangdong Investment
The main advantage of trading using opposite Artesian Resources and Guangdong Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artesian Resources position performs unexpectedly, Guangdong Investment 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 Guangdong Investment will offset losses from the drop in Guangdong Investment's long position.| Artesian Resources vs. California Water Service | Artesian Resources vs. SJW Group Common | Artesian Resources vs. The York Water | Artesian Resources vs. American States Water |
| Guangdong Investment vs. Artesian Resources | Guangdong Investment vs. Global Water Resources | Guangdong Investment vs. Essential Utilities | Guangdong Investment vs. American Water Works |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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