Correlation Between 159681 and Guangzhou Automobile
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By analyzing existing cross correlation between 159681 and Guangzhou Automobile Group, you can compare the effects of market volatilities on 159681 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 159681 with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159681 and Guangzhou Automobile.
Diversification Opportunities for 159681 and Guangzhou Automobile
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 159681 and Guangzhou is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding 159681 and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and 159681 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 159681 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 159681 i.e., 159681 and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between 159681 and Guangzhou Automobile
Assuming the 90 days trading horizon 159681 is expected to generate 1.27 times more return on investment than Guangzhou Automobile. However, 159681 is 1.27 times more volatile than Guangzhou Automobile Group. It trades about -0.01 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about -0.03 per unit of risk. If you would invest 112.00 in 159681 on October 15, 2024 and sell it today you would lose (25.00) from holding 159681 or give up 22.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
159681 vs. Guangzhou Automobile Group
Performance |
| Timeline |
| 159681 |
| Guangzhou Automobile |
159681 and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 159681 and Guangzhou Automobile
The main advantage of trading using opposite 159681 and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159681 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 159681 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. 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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