Correlation Between Anhui Huaren and Guangzhou Automobile
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By analyzing existing cross correlation between Anhui Huaren Health and Guangzhou Automobile Group, you can compare the effects of market volatilities on Anhui Huaren 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 Anhui Huaren with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaren and Guangzhou Automobile.
Diversification Opportunities for Anhui Huaren and Guangzhou Automobile
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Guangzhou is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaren Health and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Anhui Huaren 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 Anhui Huaren Health 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 Anhui Huaren i.e., Anhui Huaren and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Anhui Huaren and Guangzhou Automobile
Assuming the 90 days trading horizon Anhui Huaren Health is expected to generate 1.58 times more return on investment than Guangzhou Automobile. However, Anhui Huaren is 1.58 times more volatile than Guangzhou Automobile Group. It trades about 0.03 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about 0.01 per unit of risk. If you would invest 1,159 in Anhui Huaren Health on September 3, 2024 and sell it today you would earn a total of 57.00 from holding Anhui Huaren Health or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Huaren Health vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Anhui Huaren Health |
| Guangzhou Automobile |
Anhui Huaren and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaren and Guangzhou Automobile
The main advantage of trading using opposite Anhui Huaren and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaren 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.| Anhui Huaren vs. Beijing Wantai Biological | Anhui Huaren vs. Aluminum Corp of | Anhui Huaren vs. COL Digital Publishing | Anhui Huaren vs. Shaanxi Meineng Clean |
| Guangzhou Automobile vs. PetroChina Co Ltd | Guangzhou Automobile vs. China Mobile Limited | Guangzhou Automobile vs. Industrial and Commercial | Guangzhou Automobile vs. China Life Insurance |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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