Correlation Between Zotye Automobile and Guangzhou Fangbang
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By analyzing existing cross correlation between Zotye Automobile Co and Guangzhou Fangbang Electronics, you can compare the effects of market volatilities on Zotye Automobile and Guangzhou Fangbang 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 Zotye Automobile with a short position of Guangzhou Fangbang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and Guangzhou Fangbang.
Diversification Opportunities for Zotye Automobile and Guangzhou Fangbang
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zotye and Guangzhou is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and Guangzhou Fangbang Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Fangbang and Zotye 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 Zotye Automobile Co are associated (or correlated) with Guangzhou Fangbang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Fangbang has no effect on the direction of Zotye Automobile i.e., Zotye Automobile and Guangzhou Fangbang go up and down completely randomly.
Pair Corralation between Zotye Automobile and Guangzhou Fangbang
Assuming the 90 days trading horizon Zotye Automobile Co is expected to under-perform the Guangzhou Fangbang. But the stock apears to be less risky and, when comparing its historical volatility, Zotye Automobile Co is 1.06 times less risky than Guangzhou Fangbang. The stock trades about -0.02 of its potential returns per unit of risk. The Guangzhou Fangbang Electronics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,477 in Guangzhou Fangbang Electronics on October 15, 2024 and sell it today you would lose (2,274) from holding Guangzhou Fangbang Electronics or give up 41.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zotye Automobile Co vs. Guangzhou Fangbang Electronics
Performance |
| Timeline |
| Zotye Automobile |
| Guangzhou Fangbang |
Zotye Automobile and Guangzhou Fangbang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and Guangzhou Fangbang
The main advantage of trading using opposite Zotye Automobile and Guangzhou Fangbang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye Automobile position performs unexpectedly, Guangzhou Fangbang 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 Fangbang will offset losses from the drop in Guangzhou Fangbang's long position.| Zotye Automobile vs. Shuhua Sports Co | Zotye Automobile vs. Changchun Engley Automobile | Zotye Automobile vs. Aba Chemicals Corp | Zotye Automobile vs. Hainan Haiqi Transportation |
| Guangzhou Fangbang vs. Universal Scientific Industrial | Guangzhou Fangbang vs. Jiaozuo Wanfang Aluminum | Guangzhou Fangbang vs. Porton Fine Chemicals | Guangzhou Fangbang vs. Shanghai Yanpu Metal |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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