Correlation Between Guangzhou Automobile and Jiajia Food
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By analyzing existing cross correlation between Guangzhou Automobile Group and Jiajia Food Group, you can compare the effects of market volatilities on Guangzhou Automobile and Jiajia Food 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 Jiajia Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Jiajia Food.
Diversification Opportunities for Guangzhou Automobile and Jiajia Food
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Jiajia is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Jiajia Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiajia Food Group 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 Jiajia Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiajia Food Group has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Jiajia Food go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Jiajia Food
Assuming the 90 days trading horizon Guangzhou Automobile is expected to generate 8.3 times less return on investment than Jiajia Food. But when comparing it to its historical volatility, Guangzhou Automobile Group is 1.8 times less risky than Jiajia Food. It trades about 0.1 of its potential returns per unit of risk. Jiajia Food Group is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 277.00 in Jiajia Food Group on August 25, 2024 and sell it today you would earn a total of 141.00 from holding Jiajia Food Group or generate 50.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Jiajia Food Group
Performance |
| Timeline |
| Guangzhou Automobile |
| Jiajia Food Group |
Guangzhou Automobile and Jiajia Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Jiajia Food
The main advantage of trading using opposite Guangzhou Automobile and Jiajia Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Jiajia Food 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 Jiajia Food will offset losses from the drop in Jiajia Food's long position.| Guangzhou Automobile vs. Lutian Machinery Co | Guangzhou Automobile vs. China Longyuan Power | Guangzhou Automobile vs. Changshu Tongrun Auto | Guangzhou Automobile vs. PetroChina Co Ltd |
| Jiajia Food vs. China Petroleum Chemical | Jiajia Food vs. PetroChina Co Ltd | Jiajia Food vs. China State Construction | Jiajia Food vs. China Railway Group |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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