Correlation Between Kangxin New and Guangzhou Automobile
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By analyzing existing cross correlation between Kangxin New Materials and Guangzhou Automobile Group, you can compare the effects of market volatilities on Kangxin New 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 Kangxin New with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kangxin New and Guangzhou Automobile.
Diversification Opportunities for Kangxin New and Guangzhou Automobile
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kangxin and Guangzhou is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kangxin New Materials and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Kangxin New 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 Kangxin New Materials 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 Kangxin New i.e., Kangxin New and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Kangxin New and Guangzhou Automobile
Assuming the 90 days trading horizon Kangxin New Materials is expected to under-perform the Guangzhou Automobile. In addition to that, Kangxin New is 1.61 times more volatile than Guangzhou Automobile Group. It trades about -0.02 of its total potential returns per unit of risk. Guangzhou Automobile Group is currently generating about -0.03 per unit of volatility. If you would invest 1,151 in Guangzhou Automobile Group on October 16, 2024 and sell it today you would lose (313.00) from holding Guangzhou Automobile Group or give up 27.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kangxin New Materials vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Kangxin New Materials |
| Guangzhou Automobile |
Kangxin New and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kangxin New and Guangzhou Automobile
The main advantage of trading using opposite Kangxin New and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kangxin New 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.| Kangxin New vs. Zhengzhou Coal Mining | Kangxin New vs. GuoChuang Software Co | Kangxin New vs. Ningbo Jintian Copper | Kangxin New vs. Digiwin Software Co |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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