Correlation Between Guangzhou Automobile and Ningbo Fangzheng
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By analyzing existing cross correlation between Guangzhou Automobile Group and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Guangzhou Automobile and Ningbo Fangzheng 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 Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Ningbo Fangzheng.
Diversification Opportunities for Guangzhou Automobile and Ningbo Fangzheng
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Ningbo is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut 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 Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Ningbo Fangzheng
Assuming the 90 days trading horizon Guangzhou Automobile Group is expected to generate 0.62 times more return on investment than Ningbo Fangzheng. However, Guangzhou Automobile Group is 1.6 times less risky than Ningbo Fangzheng. It trades about 0.08 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.06 per unit of risk. If you would invest 774.00 in Guangzhou Automobile Group on September 26, 2024 and sell it today you would earn a total of 173.00 from holding Guangzhou Automobile Group or generate 22.35% 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. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Guangzhou Automobile |
| Ningbo Fangzheng Aut |
Guangzhou Automobile and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Ningbo Fangzheng
The main advantage of trading using opposite Guangzhou Automobile and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Ningbo Fangzheng 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 Ningbo Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| Guangzhou Automobile vs. New China Life | Guangzhou Automobile vs. Ming Yang Smart | Guangzhou Automobile vs. 159681 | Guangzhou Automobile vs. 159005 |
| Ningbo Fangzheng vs. China Life Insurance | Ningbo Fangzheng vs. Cinda Securities Co | Ningbo Fangzheng vs. Piotech Inc A | Ningbo Fangzheng vs. Dongxing Sec Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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