Correlation Between Guangzhou Automobile and Zhengzhou Qianweiyangchu
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By analyzing existing cross correlation between Guangzhou Automobile Group and Zhengzhou Qianweiyangchu Food, you can compare the effects of market volatilities on Guangzhou Automobile and Zhengzhou Qianweiyangchu 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 Guangzhou Automobile with a short position of Zhengzhou Qianweiyangchu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Zhengzhou Qianweiyangchu.
Diversification Opportunities for Guangzhou Automobile and Zhengzhou Qianweiyangchu
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Zhengzhou is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Zhengzhou Qianweiyangchu Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengzhou Qianweiyangchu and Guangzhou Automobile 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 Guangzhou Automobile Group are associated (or correlated) with Zhengzhou Qianweiyangchu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengzhou Qianweiyangchu has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Zhengzhou Qianweiyangchu go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Zhengzhou Qianweiyangchu
Assuming the 90 days trading horizon Guangzhou Automobile Group is expected to generate 0.59 times more return on investment than Zhengzhou Qianweiyangchu. However, Guangzhou Automobile Group is 1.7 times less risky than Zhengzhou Qianweiyangchu. It trades about -0.04 of its potential returns per unit of risk. Zhengzhou Qianweiyangchu Food is currently generating about -0.04 per unit of risk. If you would invest 1,197 in Guangzhou Automobile Group on August 29, 2024 and sell it today you would lose (344.00) from holding Guangzhou Automobile Group or give up 28.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Zhengzhou Qianweiyangchu Food
Performance |
| Timeline |
| Guangzhou Automobile |
| Zhengzhou Qianweiyangchu |
Guangzhou Automobile and Zhengzhou Qianweiyangchu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Zhengzhou Qianweiyangchu
The main advantage of trading using opposite Guangzhou Automobile and Zhengzhou Qianweiyangchu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Zhengzhou Qianweiyangchu 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 Zhengzhou Qianweiyangchu will offset losses from the drop in Zhengzhou Qianweiyangchu's long position.| Guangzhou Automobile vs. Grinm Advanced Materials | Guangzhou Automobile vs. AVIC Fund Management | Guangzhou Automobile vs. China Railway Materials | Guangzhou Automobile vs. Cicc Fund Management |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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