Correlation Between Hunan Investment and Guangzhou Automobile
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By analyzing existing cross correlation between Hunan Investment Group and Guangzhou Automobile Group, you can compare the effects of market volatilities on Hunan Investment and Guangzhou Automobile 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 Hunan Investment with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Investment and Guangzhou Automobile.
Diversification Opportunities for Hunan Investment and Guangzhou Automobile
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hunan and Guangzhou is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Investment Group and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Hunan 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 Hunan Investment Group are associated (or correlated) with Guangzhou Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Automobile has no effect on the direction of Hunan Investment i.e., Hunan Investment and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Hunan Investment and Guangzhou Automobile
Assuming the 90 days trading horizon Hunan Investment Group is expected to generate 1.4 times more return on investment than Guangzhou Automobile. However, Hunan Investment is 1.4 times more volatile than Guangzhou Automobile Group. It trades about 0.03 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about -0.01 per unit of risk. If you would invest 517.00 in Hunan Investment Group on September 14, 2024 and sell it today you would earn a total of 98.00 from holding Hunan Investment Group or generate 18.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Investment Group vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Hunan Investment |
| Guangzhou Automobile |
Hunan Investment and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Investment and Guangzhou Automobile
The main advantage of trading using opposite Hunan Investment and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Investment position performs unexpectedly, Guangzhou Automobile 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 Automobile will offset losses from the drop in Guangzhou Automobile's long position.| Hunan Investment vs. Kweichow Moutai Co | Hunan Investment vs. Jiangsu Pacific Quartz | Hunan Investment vs. Shenzhen Transsion Holdings | Hunan Investment vs. Beijing Roborock Technology |
| Guangzhou Automobile vs. Henan Shuanghui Investment | Guangzhou Automobile vs. Hunan Investment Group | Guangzhou Automobile vs. Kunwu Jiuding Investment | Guangzhou Automobile vs. Harvest Fund Management |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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