Correlation Between Guild Holdings and CNFinance Holdings

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

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

Diversification Opportunities for Guild Holdings and CNFinance Holdings

-0.64

Correlation Coefficient

Guild Holdings  CNFinance Holdings

Excellent diversification

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

Pair Corralation between Guild Holdings and CNFinance Holdings

Given the investment horizon of 90 days Guild Holdings Co is expected to generate 0.77 times more return on investment than CNFinance Holdings. However, Guild Holdings Co is 1.3 times less risky than CNFinance Holdings. It trades about 0.05 of its potential returns per unit of risk. CNFinance Holdings is currently generating about -0.11 per unit of risk. If you would invest  1,168  in Guild Holdings Co on February 3, 2025 and sell it today you would earn a total of  95.00  from holding Guild Holdings Co or generate 8.13% return on investment over 90 days.

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

Guild Holdings Co  vs.  CNFinance Holdings

Guild Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guild Holdings Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, Guild Holdings may actually be approaching a critical reversion point that can send shares even higher in June 2025.

CNFinance Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days CNFinance Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Guild Holdings and CNFinance Holdings

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

The idea behind Guild Holdings Co and CNFinance Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.