Correlation Between Guangdong Investment and Virtus Investment

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Guangdong Investment and Virtus 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 Guangdong Investment and Virtus Investment 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 Virtus Investment Partners,, you can compare the effects of market volatilities on Guangdong Investment and Virtus 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 Guangdong Investment with a short position of Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and Virtus Investment.

Diversification Opportunities for Guangdong Investment and Virtus Investment

-0.4
  Correlation Coefficient

Very good diversification

The 3 months correlation between Guangdong and Virtus is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and Virtus Investment Partners, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and Virtus Investment go up and down completely randomly.

Pair Corralation between Guangdong Investment and Virtus Investment

Assuming the 90 days horizon Guangdong Investment Limited is expected to generate 0.66 times more return on investment than Virtus Investment. However, Guangdong Investment Limited is 1.53 times less risky than Virtus Investment. It trades about -0.16 of its potential returns per unit of risk. Virtus Investment Partners, is currently generating about -0.46 per unit of risk. If you would invest  83.00  in Guangdong Investment Limited on October 14, 2024 and sell it today you would lose (3.00) from holding Guangdong Investment Limited or give up 3.61% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Guangdong Investment Limited  vs.  Virtus Investment Partners,

 Performance 
       Timeline  
Guangdong Investment 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Guangdong Investment Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Guangdong Investment reported solid returns over the last few months and may actually be approaching a breakup point.
Virtus Investment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Virtus Investment Partners, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Virtus Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Guangdong Investment and Virtus Investment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Guangdong Investment and Virtus Investment

The main advantage of trading using opposite Guangdong Investment and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment position performs unexpectedly, Virtus 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 Virtus Investment will offset losses from the drop in Virtus Investment's long position.
The idea behind Guangdong Investment Limited and Virtus Investment Partners, 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

Other Complementary Tools

Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings