Correlation Between Guangzhou Automobile and Chengdu Kanghua
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By analyzing existing cross correlation between Guangzhou Automobile Group and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Guangzhou Automobile and Chengdu Kanghua 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 Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Chengdu Kanghua.
Diversification Opportunities for Guangzhou Automobile and Chengdu Kanghua
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guangzhou and Chengdu is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol 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 Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Chengdu Kanghua
Assuming the 90 days trading horizon Guangzhou Automobile Group is expected to under-perform the Chengdu Kanghua. In addition to that, Guangzhou Automobile is 1.42 times more volatile than Chengdu Kanghua Biological. It trades about -0.09 of its total potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.09 per unit of volatility. If you would invest 5,260 in Chengdu Kanghua Biological on November 3, 2024 and sell it today you would lose (134.00) from holding Chengdu Kanghua Biological or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Guangzhou Automobile |
| Chengdu Kanghua Biol |
Guangzhou Automobile and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Chengdu Kanghua
The main advantage of trading using opposite Guangzhou Automobile and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Guangzhou Automobile vs. Soyea Technology Co | Guangzhou Automobile vs. Guangzhou KingTeller Technology | Guangzhou Automobile vs. Tieling Newcity Investment | Guangzhou Automobile vs. Montage Technology Co |
| Chengdu Kanghua vs. Baoding Dongli Machinery | Chengdu Kanghua vs. Marssenger Kitchenware Co | Chengdu Kanghua vs. Shantui Construction Machinery | Chengdu Kanghua vs. Yindu Kitchen Equipment |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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