Correlation Between State Grid and Guangzhou Automobile
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By analyzing existing cross correlation between State Grid InformationCommunication and Guangzhou Automobile Group, you can compare the effects of market volatilities on State Grid 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 State Grid with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and Guangzhou Automobile.
Diversification Opportunities for State Grid and Guangzhou Automobile
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between State and Guangzhou is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and State Grid 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 State Grid InformationCommunication 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 State Grid i.e., State Grid and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between State Grid and Guangzhou Automobile
Assuming the 90 days trading horizon State Grid is expected to generate 1.05 times less return on investment than Guangzhou Automobile. In addition to that, State Grid is 1.61 times more volatile than Guangzhou Automobile Group. It trades about 0.11 of its total potential returns per unit of risk. Guangzhou Automobile Group is currently generating about 0.19 per unit of volatility. If you would invest 799.00 in Guangzhou Automobile Group on September 1, 2024 and sell it today you would earn a total of 85.00 from holding Guangzhou Automobile Group or generate 10.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. Guangzhou Automobile Group
Performance |
| Timeline |
| State Grid Informati |
| Guangzhou Automobile |
State Grid and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and Guangzhou Automobile
The main advantage of trading using opposite State Grid and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid 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.| State Grid vs. Guangzhou KingTeller Technology | State Grid vs. Aofu Environmental Technology | State Grid vs. Guangdong Liantai Environmental | State Grid vs. Hubei Forbon Technology |
| 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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