Correlation Between Guangzhou Automobile and Kailong High
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By analyzing existing cross correlation between Guangzhou Automobile Group and Kailong High Technology, you can compare the effects of market volatilities on Guangzhou Automobile and Kailong High 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 Kailong High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Kailong High.
Diversification Opportunities for Guangzhou Automobile and Kailong High
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Kailong is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Kailong High Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kailong High Technology 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 Kailong High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kailong High Technology has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Kailong High go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Kailong High
Assuming the 90 days trading horizon Guangzhou Automobile Group is expected to generate 0.6 times more return on investment than Kailong High. However, Guangzhou Automobile Group is 1.65 times less risky than Kailong High. It trades about 0.09 of its potential returns per unit of risk. Kailong High Technology is currently generating about 0.05 per unit of risk. If you would invest 713.00 in Guangzhou Automobile Group on October 18, 2024 and sell it today you would earn a total of 143.00 from holding Guangzhou Automobile Group or generate 20.06% 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. Kailong High Technology
Performance |
| Timeline |
| Guangzhou Automobile |
| Kailong High Technology |
Guangzhou Automobile and Kailong High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Kailong High
The main advantage of trading using opposite Guangzhou Automobile and Kailong High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Kailong High 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 Kailong High will offset losses from the drop in Kailong High's long position.| Guangzhou Automobile vs. Qijing Machinery | Guangzhou Automobile vs. Hunan Tyen Machinery | Guangzhou Automobile vs. Shaanxi Construction Machinery | Guangzhou Automobile vs. Shuhua Sports Co |
| Kailong High vs. Sanbo Hospital Management | Kailong High vs. Chengdu Spaceon Electronics | Kailong High vs. Dr Peng Telecom | Kailong High vs. State Grid InformationCommunication |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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