Correlation Between 159005 and Guangzhou Automobile
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By analyzing existing cross correlation between 159005 and Guangzhou Automobile Group, you can compare the effects of market volatilities on 159005 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 159005 with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159005 and Guangzhou Automobile.
Diversification Opportunities for 159005 and Guangzhou Automobile
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 159005 and Guangzhou is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding 159005 and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and 159005 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 159005 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 159005 i.e., 159005 and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between 159005 and Guangzhou Automobile
Assuming the 90 days trading horizon 159005 is expected to generate 97.87 times less return on investment than Guangzhou Automobile. But when comparing it to its historical volatility, 159005 is 143.34 times less risky than Guangzhou Automobile. It trades about 0.21 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 853.00 in Guangzhou Automobile Group on September 27, 2024 and sell it today you would earn a total of 94.00 from holding Guangzhou Automobile Group or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
159005 vs. Guangzhou Automobile Group
Performance |
| Timeline |
| 159005 |
| Guangzhou Automobile |
159005 and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 159005 and Guangzhou Automobile
The main advantage of trading using opposite 159005 and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159005 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.The idea behind 159005 and Guangzhou Automobile Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Guangzhou Automobile vs. New China Life | Guangzhou Automobile vs. Ming Yang Smart | Guangzhou Automobile vs. 159681 | Guangzhou Automobile vs. 159005 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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