Correlation Between Haima Automobile and Guangzhou Automobile
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By analyzing existing cross correlation between Haima Automobile Group and Guangzhou Automobile Group, you can compare the effects of market volatilities on Haima Automobile 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 Haima Automobile with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haima Automobile and Guangzhou Automobile.
Diversification Opportunities for Haima Automobile and Guangzhou Automobile
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haima and Guangzhou is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Haima Automobile 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 Haima Automobile 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 Haima Automobile 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 Haima Automobile i.e., Haima Automobile and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Haima Automobile and Guangzhou Automobile
Assuming the 90 days trading horizon Haima Automobile Group is expected to generate 1.79 times more return on investment than Guangzhou Automobile. However, Haima Automobile is 1.79 times more volatile than Guangzhou Automobile Group. It trades about 0.18 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about 0.15 per unit of risk. If you would invest 300.00 in Haima Automobile Group on August 28, 2024 and sell it today you would earn a total of 152.00 from holding Haima Automobile Group or generate 50.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haima Automobile Group vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Haima Automobile |
| Guangzhou Automobile |
Haima Automobile and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haima Automobile and Guangzhou Automobile
The main advantage of trading using opposite Haima Automobile and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haima Automobile 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.| Haima Automobile vs. Xiangyang Automobile Bearing | Haima Automobile vs. Northking Information Technology | Haima Automobile vs. Changzhou Evergreen Technology | Haima Automobile vs. Jiangsu Xinri E Vehicle |
| Guangzhou Automobile vs. Lutian Machinery Co | Guangzhou Automobile vs. China Longyuan Power | Guangzhou Automobile vs. Changshu Tongrun Auto | Guangzhou Automobile vs. PetroChina Co Ltd |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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