Correlation Between Ningbo Fangzheng and Guangzhou Automobile
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Guangzhou Automobile Group, you can compare the effects of market volatilities on Ningbo Fangzheng 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 Ningbo Fangzheng with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Guangzhou Automobile.
Diversification Opportunities for Ningbo Fangzheng and Guangzhou Automobile
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Guangzhou is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Ningbo Fangzheng 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 Ningbo Fangzheng Automobile 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 Ningbo Fangzheng i.e., Ningbo Fangzheng and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Guangzhou Automobile
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to under-perform the Guangzhou Automobile. In addition to that, Ningbo Fangzheng is 1.5 times more volatile than Guangzhou Automobile Group. It trades about -0.03 of its total potential returns per unit of risk. Guangzhou Automobile Group is currently generating about 0.08 per unit of volatility. If you would invest 780.00 in Guangzhou Automobile Group on September 27, 2024 and sell it today you would earn a total of 167.00 from holding Guangzhou Automobile Group or generate 21.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Guangzhou Automobile |
Ningbo Fangzheng and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Guangzhou Automobile
The main advantage of trading using opposite Ningbo Fangzheng and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng 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.| Ningbo Fangzheng vs. China Life Insurance | Ningbo Fangzheng vs. Cinda Securities Co | Ningbo Fangzheng vs. Piotech Inc A | Ningbo Fangzheng vs. Dongxing Sec Co |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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