Correlation Between G Bits and Hang Xiao

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

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

Diversification Opportunities for G Bits and Hang Xiao

0.19

Correlation Coefficient

G Bits  Hang Xiao

Average diversification

The 3 months correlation between 603444 and Hang is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding G bits Network Technology and Hang Xiao Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Xiao Steel and G Bits 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 G bits Network Technology are associated (or correlated) with Hang Xiao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Xiao Steel has no effect on the direction of G Bits i.e., G Bits and Hang Xiao go up and down completely randomly.

Pair Corralation between G Bits and Hang Xiao

Assuming the 90 days trading horizon G Bits is expected to generate 1.21 times less return on investment than Hang Xiao. In addition to that, G Bits is 1.12 times more volatile than Hang Xiao Steel. It trades about 0.04 of its total potential returns per unit of risk. Hang Xiao Steel is currently generating about 0.06 per unit of volatility. If you would invest  245.00  in Hang Xiao Steel on September 26, 2024 and sell it today you would earn a total of  21.00  from holding Hang Xiao Steel or generate 8.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

G bits Network Technology  vs.  Hang Xiao Steel

G bits Network

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in G bits Network Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, G Bits may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hang Xiao Steel

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hang Xiao Steel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hang Xiao may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with G Bits and Hang Xiao

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

The idea behind G bits Network Technology and Hang Xiao Steel 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.