Correlation Between Thompson Bond and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both Thompson Bond and Guinness Atkinson 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 Thompson Bond and Guinness Atkinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thompson Bond Fund and Guinness Atkinson China, you can compare the effects of market volatilities on Thompson Bond and Guinness Atkinson 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 Thompson Bond with a short position of Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thompson Bond and Guinness Atkinson.
Diversification Opportunities for Thompson Bond and Guinness Atkinson
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thompson and Guinness is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Thompson Bond Fund and Guinness Atkinson China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson China and Thompson Bond 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 Thompson Bond Fund are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson China has no effect on the direction of Thompson Bond i.e., Thompson Bond and Guinness Atkinson go up and down completely randomly.
Pair Corralation between Thompson Bond and Guinness Atkinson
Assuming the 90 days horizon Thompson Bond Fund is expected to generate 0.07 times more return on investment than Guinness Atkinson. However, Thompson Bond Fund is 13.55 times less risky than Guinness Atkinson. It trades about 0.41 of its potential returns per unit of risk. Guinness Atkinson China is currently generating about -0.17 per unit of risk. If you would invest 1,038 in Thompson Bond Fund on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Thompson Bond Fund or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thompson Bond Fund vs. Guinness Atkinson China
Performance |
| Timeline |
| Thompson Bond |
| Guinness Atkinson China |
Thompson Bond and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thompson Bond and Guinness Atkinson
The main advantage of trading using opposite Thompson Bond and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thompson Bond position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.| Thompson Bond vs. Tcw Total Return | Thompson Bond vs. Amg Yacktman Focused | Thompson Bond vs. Fidelity Advisor Floating | Thompson Bond vs. Doubleline Total Return |
| Guinness Atkinson vs. Guinness Atkinson Asia | Guinness Atkinson vs. Matthews China Fund | Guinness Atkinson vs. Columbia Greater China | Guinness Atkinson vs. Eaton Vance Greater |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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