Correlation Between Guangdong Investment and Westshore Terminals

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

By analyzing existing cross correlation between Guangdong Investment Limited and Westshore Terminals Investment, you can compare the effects of market volatilities on Guangdong Investment and Westshore Terminals 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 Guangdong Investment with a short position of Westshore Terminals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and Westshore Terminals.

Diversification Opportunities for Guangdong Investment and Westshore Terminals

0.64

Correlation Coefficient

Guangdong Investment  Westshore Terminals

Poor diversification

The 3 months correlation between Guangdong and Westshore is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and Westshore Terminals Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westshore Terminals and Guangdong Investment 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 Guangdong Investment Limited are associated (or correlated) with Westshore Terminals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westshore Terminals has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and Westshore Terminals go up and down completely randomly.

Pair Corralation between Guangdong Investment and Westshore Terminals

If you would invest  1,936  in Westshore Terminals Investment on May 7, 2025 and sell it today you would earn a total of  107.00  from holding Westshore Terminals Investment or generate 5.53% return on investment over 90 days.

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

Guangdong Investment Limited  vs.  Westshore Terminals Investment

Guangdong Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guangdong Investment Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Guangdong Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Westshore Terminals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Westshore Terminals Investment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical indicators, Westshore Terminals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guangdong Investment and Westshore Terminals

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

The idea behind Guangdong Investment Limited and Westshore Terminals Investment 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.