Correlation Between Guangzhou Automobile and Hangzhou Weiguang
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By analyzing existing cross correlation between Guangzhou Automobile Group and Hangzhou Weiguang Electronic, you can compare the effects of market volatilities on Guangzhou Automobile and Hangzhou Weiguang 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 Hangzhou Weiguang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Hangzhou Weiguang.
Diversification Opportunities for Guangzhou Automobile and Hangzhou Weiguang
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guangzhou and Hangzhou is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Hangzhou Weiguang Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Weiguang 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 Hangzhou Weiguang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Weiguang has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Hangzhou Weiguang go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Hangzhou Weiguang
Assuming the 90 days trading horizon Guangzhou Automobile Group is expected to under-perform the Hangzhou Weiguang. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Automobile Group is 1.36 times less risky than Hangzhou Weiguang. The stock trades about -0.02 of its potential returns per unit of risk. The Hangzhou Weiguang Electronic is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,782 in Hangzhou Weiguang Electronic on November 2, 2024 and sell it today you would lose (108.00) from holding Hangzhou Weiguang Electronic or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Hangzhou Weiguang Electronic
Performance |
| Timeline |
| Guangzhou Automobile |
| Hangzhou Weiguang |
Guangzhou Automobile and Hangzhou Weiguang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Hangzhou Weiguang
The main advantage of trading using opposite Guangzhou Automobile and Hangzhou Weiguang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Hangzhou Weiguang 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 Hangzhou Weiguang will offset losses from the drop in Hangzhou Weiguang's long position.| Guangzhou Automobile vs. China National Software | Guangzhou Automobile vs. Linkage Software Co | Guangzhou Automobile vs. Glodon Software Co | Guangzhou Automobile vs. Daoming OpticsChemical Co |
| Hangzhou Weiguang vs. Eyebright Medical Technology | Hangzhou Weiguang vs. Bonree Data Technology | Hangzhou Weiguang vs. Jinxiandai Information Industry | Hangzhou Weiguang vs. YLZ Information Tech |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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