Correlation Between Guangdong Investment and Artesian Resources
Can any of the company-specific risk be diversified away by investing in both Guangdong Investment and Artesian Resources 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 Artesian Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangdong Investment and Artesian Resources, you can compare the effects of market volatilities on Guangdong Investment and Artesian Resources 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 Artesian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and Artesian Resources.
Diversification Opportunities for Guangdong Investment and Artesian Resources
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangdong and Artesian is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment and Artesian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artesian Resources 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 are associated (or correlated) with Artesian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artesian Resources has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and Artesian Resources go up and down completely randomly.
Pair Corralation between Guangdong Investment and Artesian Resources
Assuming the 90 days horizon Guangdong Investment is expected to under-perform the Artesian Resources. In addition to that, Guangdong Investment is 2.31 times more volatile than Artesian Resources. It trades about -0.04 of its total potential returns per unit of risk. Artesian Resources is currently generating about 0.06 per unit of volatility. If you would invest 3,401 in Artesian Resources on August 27, 2024 and sell it today you would earn a total of 81.00 from holding Artesian Resources or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Investment vs. Artesian Resources
Performance |
| Timeline |
| Guangdong Investment |
| Artesian Resources |
Guangdong Investment and Artesian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Investment and Artesian Resources
The main advantage of trading using opposite Guangdong Investment and Artesian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment position performs unexpectedly, Artesian Resources 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 Artesian Resources will offset losses from the drop in Artesian Resources' long position.| Guangdong Investment vs. Artesian Resources | Guangdong Investment vs. Global Water Resources | Guangdong Investment vs. Essential Utilities | Guangdong Investment vs. American Water Works |
| Artesian Resources vs. California Water Service | Artesian Resources vs. SJW Group Common | Artesian Resources vs. The York Water | Artesian Resources vs. American States Water |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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