Correlation Between Hanison Construction and Guangzhou Baiyunshan

Can any of the company-specific risk be diversified away by investing in both Hanison Construction and Guangzhou Baiyunshan 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 Hanison Construction and Guangzhou Baiyunshan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hanison Construction Holdings and Guangzhou Baiyunshan Pharmaceutical, you can compare the effects of market volatilities on Hanison Construction and Guangzhou Baiyunshan 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 Hanison Construction with a short position of Guangzhou Baiyunshan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanison Construction and Guangzhou Baiyunshan.

Diversification Opportunities for Hanison Construction and Guangzhou Baiyunshan

0.0

Correlation Coefficient

Hanison Construction  Guangzhou Baiyunshan

Pay attention - limited upside

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

Pair Corralation between Hanison Construction and Guangzhou Baiyunshan

If you would invest  153.00  in Guangzhou Baiyunshan Pharmaceutical on September 14, 2024 and sell it today you would earn a total of  63.00  from holding Guangzhou Baiyunshan Pharmaceutical or generate 41.18% return on investment over 90 days.

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

Hanison Construction Holdings  vs.  Guangzhou Baiyunshan Pharmaceu

Hanison Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hanison Construction Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Hanison Construction is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Guangzhou Baiyunshan

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guangzhou Baiyunshan Pharmaceutical are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Guangzhou Baiyunshan reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanison Construction and Guangzhou Baiyunshan

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

The idea behind Hanison Construction Holdings and Guangzhou Baiyunshan Pharmaceutical 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.