Correlation Between Cangzhou Mingzhu and Guangzhou Automobile
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By analyzing existing cross correlation between Cangzhou Mingzhu Plastic and Guangzhou Automobile Group, you can compare the effects of market volatilities on Cangzhou Mingzhu 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 Cangzhou Mingzhu with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cangzhou Mingzhu and Guangzhou Automobile.
Diversification Opportunities for Cangzhou Mingzhu and Guangzhou Automobile
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cangzhou and Guangzhou is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cangzhou Mingzhu Plastic and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Cangzhou Mingzhu 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 Cangzhou Mingzhu Plastic 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 Cangzhou Mingzhu i.e., Cangzhou Mingzhu and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Cangzhou Mingzhu and Guangzhou Automobile
Assuming the 90 days trading horizon Cangzhou Mingzhu Plastic is expected to under-perform the Guangzhou Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Cangzhou Mingzhu Plastic is 1.0 times less risky than Guangzhou Automobile. The stock trades about -0.03 of its potential returns per unit of risk. The Guangzhou Automobile Group is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,151 in Guangzhou Automobile Group on October 16, 2024 and sell it today you would lose (313.00) from holding Guangzhou Automobile Group or give up 27.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cangzhou Mingzhu Plastic vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Cangzhou Mingzhu Plastic |
| Guangzhou Automobile |
Cangzhou Mingzhu and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cangzhou Mingzhu and Guangzhou Automobile
The main advantage of trading using opposite Cangzhou Mingzhu and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cangzhou Mingzhu 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.| Cangzhou Mingzhu vs. Zhengzhou Coal Mining | Cangzhou Mingzhu vs. Western Metal Materials | Cangzhou Mingzhu vs. Hefei Metalforming Mach | Cangzhou Mingzhu vs. North Copper Shanxi |
| Guangzhou Automobile vs. Jinsanjiang Silicon Material | Guangzhou Automobile vs. Kangxin New Materials | Guangzhou Automobile vs. Western Metal Materials | Guangzhou Automobile vs. Cangzhou Mingzhu Plastic |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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