Correlation Between Nanjing Putian and Guangzhou Automobile
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Guangzhou Automobile Group, you can compare the effects of market volatilities on Nanjing Putian 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 Nanjing Putian with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Guangzhou Automobile.
Diversification Opportunities for Nanjing Putian and Guangzhou Automobile
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanjing and Guangzhou is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Nanjing Putian 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 Nanjing Putian Telecommunications 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 Nanjing Putian i.e., Nanjing Putian and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Nanjing Putian and Guangzhou Automobile
Assuming the 90 days trading horizon Nanjing Putian Telecommunications is expected to generate 1.65 times more return on investment than Guangzhou Automobile. However, Nanjing Putian is 1.65 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 0.19 per unit of risk. If you would invest 379.00 in Nanjing Putian Telecommunications on September 1, 2024 and sell it today you would earn a total of 81.00 from holding Nanjing Putian Telecommunications or generate 21.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanjing Putian Telecommunicati vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Nanjing Putian Telec |
| Guangzhou Automobile |
Nanjing Putian and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Putian and Guangzhou Automobile
The main advantage of trading using opposite Nanjing Putian and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian 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.| Nanjing Putian vs. Tieling Newcity Investment | Nanjing Putian vs. Yindu Kitchen Equipment | Nanjing Putian vs. Zhongrun Resources Investment | Nanjing Putian vs. Xiandai Investment Co |
| Guangzhou Automobile vs. Anhui Huaren Health | Guangzhou Automobile vs. Shanghai Broadband Technology | Guangzhou Automobile vs. Healthcare Co | Guangzhou Automobile vs. Dezhan HealthCare Co |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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