Correlation Between Guocheng Mining and Guangdong Jingyi

Can any of the company-specific risk be diversified away by investing in both Guocheng Mining and Guangdong Jingyi 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 Guocheng Mining and Guangdong Jingyi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guocheng Mining Co and Guangdong Jingyi Metal, you can compare the effects of market volatilities on Guocheng Mining and Guangdong Jingyi 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 Guocheng Mining with a short position of Guangdong Jingyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guocheng Mining and Guangdong Jingyi.

Diversification Opportunities for Guocheng Mining and Guangdong Jingyi

0.0

Correlation Coefficient

Guocheng Mining  Guangdong Jingyi

Pay attention - limited upside

The 3 months correlation between Guocheng and Guangdong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guocheng Mining Co and Guangdong Jingyi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jingyi Metal and Guocheng Mining 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 Guocheng Mining Co are associated (or correlated) with Guangdong Jingyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jingyi Metal has no effect on the direction of Guocheng Mining i.e., Guocheng Mining and Guangdong Jingyi go up and down completely randomly.

Pair Corralation between Guocheng Mining and Guangdong Jingyi

If you would invest  920.00  in Guocheng Mining Co on September 4, 2024 and sell it today you would earn a total of  485.00  from holding Guocheng Mining Co or generate 52.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.75%
Values	Daily Returns

Guocheng Mining Co  vs.  Guangdong Jingyi Metal

Guocheng Mining

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Guocheng Mining Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Guocheng Mining sustained solid returns over the last few months and may actually be approaching a breakup point.

Guangdong Jingyi Metal

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Guangdong Jingyi Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Guangdong Jingyi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guocheng Mining and Guangdong Jingyi

The main advantage of trading using opposite Guocheng Mining and Guangdong Jingyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guocheng Mining position performs unexpectedly, Guangdong Jingyi 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 Guangdong Jingyi will offset losses from the drop in Guangdong Jingyi's long position.

The idea behind Guocheng Mining Co and Guangdong Jingyi Metal 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.