Correlation Between Xiangyang Automobile and Guangzhou Automobile
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Guangzhou Automobile Group, you can compare the effects of market volatilities on Xiangyang 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 Xiangyang Automobile with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Guangzhou Automobile.
Diversification Opportunities for Xiangyang Automobile and Guangzhou Automobile
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xiangyang and Guangzhou is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Xiangyang 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 Xiangyang Automobile Bearing 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 Xiangyang Automobile i.e., Xiangyang Automobile and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Guangzhou Automobile
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to generate 1.73 times more return on investment than Guangzhou Automobile. However, Xiangyang Automobile is 1.73 times more volatile than Guangzhou Automobile Group. It trades about 0.16 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 421.00 in Xiangyang Automobile Bearing on August 28, 2024 and sell it today you would earn a total of 169.00 from holding Xiangyang Automobile Bearing or generate 40.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Xiangyang Automobile |
| Guangzhou Automobile |
Xiangyang Automobile and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Guangzhou Automobile
The main advantage of trading using opposite Xiangyang Automobile and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang 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.| Xiangyang Automobile vs. Loongson Technology Corp | Xiangyang Automobile vs. Chongqing Road Bridge | Xiangyang Automobile vs. Shenzhen Fortune Trend | Xiangyang Automobile vs. Wuhan Xianglong Power |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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