Correlation Between Songz Automobile and Guangzhou Automobile
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By analyzing existing cross correlation between Songz Automobile Air and Guangzhou Automobile Group, you can compare the effects of market volatilities on Songz 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 Songz Automobile with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songz Automobile and Guangzhou Automobile.
Diversification Opportunities for Songz Automobile and Guangzhou Automobile
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Songz and Guangzhou is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Songz Automobile Air and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Songz 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 Songz Automobile Air 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 Songz Automobile i.e., Songz Automobile and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Songz Automobile and Guangzhou Automobile
Assuming the 90 days trading horizon Songz Automobile Air is expected to generate 1.07 times more return on investment than Guangzhou Automobile. However, Songz Automobile is 1.07 times more volatile than Guangzhou Automobile Group. It trades about 0.23 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 628.00 in Songz Automobile Air on August 24, 2024 and sell it today you would earn a total of 78.00 from holding Songz Automobile Air or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Songz Automobile Air vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Songz Automobile Air |
| Guangzhou Automobile |
Songz Automobile and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songz Automobile and Guangzhou Automobile
The main advantage of trading using opposite Songz Automobile and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songz 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.| Songz Automobile vs. Vohringer Home Technology | Songz Automobile vs. Metro Investment Development | Songz Automobile vs. Oppein Home Group | Songz Automobile vs. Fiberhome Telecommunication Technologies |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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