Correlation Between Guangdong Investment and Global Partner
Can any of the company-specific risk be diversified away by investing in both Guangdong Investment and Global Partner 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 Guangdong Investment and Global Partner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangdong Investment Limited and Global Partner Acq, you can compare the effects of market volatilities on Guangdong Investment and Global Partner 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 Guangdong Investment with a short position of Global Partner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and Global Partner.
Diversification Opportunities for Guangdong Investment and Global Partner
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guangdong and Global is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and Global Partner Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partner Acq and Guangdong Investment 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 Guangdong Investment Limited are associated (or correlated) with Global Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partner Acq has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and Global Partner go up and down completely randomly.
Pair Corralation between Guangdong Investment and Global Partner
If you would invest 1,003 in Global Partner Acq on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Global Partner Acq or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Guangdong Investment Limited vs. Global Partner Acq
Performance |
| Timeline |
| Guangdong Investment |
| Global Partner Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guangdong Investment and Global Partner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Investment and Global Partner
The main advantage of trading using opposite Guangdong Investment and Global Partner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment position performs unexpectedly, Global Partner 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 Global Partner will offset losses from the drop in Global Partner's long position.| Guangdong Investment vs. Essential Utilities | Guangdong Investment vs. Anhui Conch Cement | Guangdong Investment vs. Endesa SA ADR | Guangdong Investment vs. HUMANA INC |
| Global Partner vs. The Wendys Co | Global Partner vs. Bank of America | Global Partner vs. Bt Brands | Global Partner vs. Guangdong Investment Limited |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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