Correlation Between GCL Poly and SunHydrogen
Can any of the company-specific risk be diversified away by investing in both GCL Poly and SunHydrogen 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 GCL Poly and SunHydrogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCL Poly Energy Holdings and SunHydrogen, you can compare the effects of market volatilities on GCL Poly and SunHydrogen 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 GCL Poly with a short position of SunHydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCL Poly and SunHydrogen.
Diversification Opportunities for GCL Poly and SunHydrogen
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GCL and SunHydrogen is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding GCL Poly Energy Holdings and SunHydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunHydrogen and GCL Poly 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 GCL Poly Energy Holdings are associated (or correlated) with SunHydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunHydrogen has no effect on the direction of GCL Poly i.e., GCL Poly and SunHydrogen go up and down completely randomly.
Pair Corralation between GCL Poly and SunHydrogen
Assuming the 90 days horizon GCL Poly Energy Holdings is expected to generate 2.67 times more return on investment than SunHydrogen. However, GCL Poly is 2.67 times more volatile than SunHydrogen. It trades about 0.01 of its potential returns per unit of risk. SunHydrogen is currently generating about -0.08 per unit of risk. If you would invest 15.00 in GCL Poly Energy Holdings on December 2, 2024 and sell it today you would lose (1.00) from holding GCL Poly Energy Holdings or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GCL Poly Energy Holdings vs. SunHydrogen
Performance |
| Timeline |
| GCL Poly Energy |
| SunHydrogen |
GCL Poly and SunHydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCL Poly and SunHydrogen
The main advantage of trading using opposite GCL Poly and SunHydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCL Poly position performs unexpectedly, SunHydrogen 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 SunHydrogen will offset losses from the drop in SunHydrogen's long position.| GCL Poly vs. SMA Solar Technology | ||
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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