Correlation Between China Region and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both China Region 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 China Region and Guinness Atkinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Region Fund and Guinness Atkinson Asia, you can compare the effects of market volatilities on China Region 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 China Region with a short position of Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Region and Guinness Atkinson.
Diversification Opportunities for China Region and Guinness Atkinson
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Guinness is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding China Region Fund and Guinness Atkinson Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Asia and China Region 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 China Region 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 Asia has no effect on the direction of China Region i.e., China Region and Guinness Atkinson go up and down completely randomly.
Pair Corralation between China Region and Guinness Atkinson
Assuming the 90 days horizon China Region Fund is expected to generate 0.88 times more return on investment than Guinness Atkinson. However, China Region Fund is 1.13 times less risky than Guinness Atkinson. It trades about 0.03 of its potential returns per unit of risk. Guinness Atkinson Asia is currently generating about 0.01 per unit of risk. If you would invest 503.00 in China Region Fund on August 30, 2024 and sell it today you would earn a total of 24.00 from holding China Region Fund or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.31% |
| Values | Daily Returns |
China Region Fund vs. Guinness Atkinson Asia
Performance |
| Timeline |
| China Region |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guinness Atkinson Asia |
China Region and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Region and Guinness Atkinson
The main advantage of trading using opposite China Region and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Region 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.| China Region vs. The Hartford Municipal | China Region vs. Intermediate Term Tax Free Bond | China Region vs. Nuveen Minnesota Municipal | China Region vs. Counterpoint Tactical Municipal |
| Guinness Atkinson vs. Guinness Atkinson China | Guinness Atkinson vs. Guinness Atkinson Global | Guinness Atkinson vs. Guinness Atkinson Global |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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