Correlation Between Guangzhou Automobile and Xilong Chemical
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By analyzing existing cross correlation between Guangzhou Automobile Group and Xilong Chemical Co, you can compare the effects of market volatilities on Guangzhou Automobile and Xilong Chemical 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 Xilong Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Xilong Chemical.
Diversification Opportunities for Guangzhou Automobile and Xilong Chemical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangzhou and Xilong is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Xilong Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilong Chemical 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 Xilong Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilong Chemical has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Xilong Chemical go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Xilong Chemical
Assuming the 90 days trading horizon Guangzhou Automobile is expected to generate 2.09 times less return on investment than Xilong Chemical. But when comparing it to its historical volatility, Guangzhou Automobile Group is 1.04 times less risky than Xilong Chemical. It trades about 0.09 of its potential returns per unit of risk. Xilong Chemical Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 740.00 in Xilong Chemical Co on November 6, 2024 and sell it today you would earn a total of 41.00 from holding Xilong Chemical Co or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Xilong Chemical Co
Performance |
| Timeline |
| Guangzhou Automobile |
| Xilong Chemical |
Guangzhou Automobile and Xilong Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Xilong Chemical
The main advantage of trading using opposite Guangzhou Automobile and Xilong Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Xilong Chemical 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 Xilong Chemical will offset losses from the drop in Xilong Chemical's long position.| Guangzhou Automobile vs. Eastern Communications Co | Guangzhou Automobile vs. COL Digital Publishing | Guangzhou Automobile vs. Runjian Communication Co | Guangzhou Automobile vs. Jiangsu Phoenix Publishing |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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