Correlation Between Guangzhou Automobile and Dymatic Chemicals
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By analyzing existing cross correlation between Guangzhou Automobile Group and Dymatic Chemicals, you can compare the effects of market volatilities on Guangzhou Automobile and Dymatic Chemicals 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 Dymatic Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Dymatic Chemicals.
Diversification Opportunities for Guangzhou Automobile and Dymatic Chemicals
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Dymatic is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Dymatic Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dymatic Chemicals 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 Dymatic Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dymatic Chemicals has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Dymatic Chemicals go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Dymatic Chemicals
Assuming the 90 days trading horizon Guangzhou Automobile Group is expected to under-perform the Dymatic Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Automobile Group is 1.3 times less risky than Dymatic Chemicals. The stock trades about -0.01 of its potential returns per unit of risk. The Dymatic Chemicals is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 771.00 in Dymatic Chemicals on September 4, 2024 and sell it today you would lose (141.00) from holding Dymatic Chemicals or give up 18.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Dymatic Chemicals
Performance |
| Timeline |
| Guangzhou Automobile |
| Dymatic Chemicals |
Guangzhou Automobile and Dymatic Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Dymatic Chemicals
The main advantage of trading using opposite Guangzhou Automobile and Dymatic Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Dymatic Chemicals 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 Dymatic Chemicals will offset losses from the drop in Dymatic Chemicals' long position.| Guangzhou Automobile vs. Industrial and Commercial | Guangzhou Automobile vs. China Construction Bank | Guangzhou Automobile vs. Agricultural Bank of | Guangzhou Automobile vs. Bank of China |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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