Correlation Between Wuhan Hvsen and G Bits

Can any of the company-specific risk be diversified away by investing in both Wuhan Hvsen and G Bits 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 Wuhan Hvsen and G Bits into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wuhan Hvsen Biotechnology and G bits Network Technology, you can compare the effects of market volatilities on Wuhan Hvsen and G Bits 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 Wuhan Hvsen with a short position of G Bits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Hvsen and G Bits.

Diversification Opportunities for Wuhan Hvsen and G Bits

0.4

Correlation Coefficient

Wuhan Hvsen  G Bits

Very weak diversification

The 3 months correlation between Wuhan and 603444 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Hvsen Biotechnology and G bits Network Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G bits Network and Wuhan Hvsen 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 Wuhan Hvsen Biotechnology are associated (or correlated) with G Bits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G bits Network has no effect on the direction of Wuhan Hvsen i.e., Wuhan Hvsen and G Bits go up and down completely randomly.

Pair Corralation between Wuhan Hvsen and G Bits

Assuming the 90 days trading horizon Wuhan Hvsen Biotechnology is expected to generate 1.08 times more return on investment than G Bits. However, Wuhan Hvsen is 1.08 times more volatile than G bits Network Technology. It trades about 0.22 of its potential returns per unit of risk. G bits Network Technology is currently generating about 0.03 per unit of risk. If you would invest  835.00  in Wuhan Hvsen Biotechnology on September 5, 2024 and sell it today you would earn a total of  461.00  from holding Wuhan Hvsen Biotechnology or generate 55.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.28%
Values	Daily Returns

Wuhan Hvsen Biotechnology  vs.  G bits Network Technology

Wuhan Hvsen Biotechnology

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wuhan Hvsen Biotechnology are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wuhan Hvsen sustained solid returns over the last few months and may actually be approaching a breakup point.

G bits Network

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in G bits Network Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, G Bits is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Wuhan Hvsen and G Bits

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

The idea behind Wuhan Hvsen Biotechnology and G bits Network Technology 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.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.