Correlation Between Guangzhou Automobile and Chongqing Road
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By analyzing existing cross correlation between Guangzhou Automobile Group and Chongqing Road Bridge, you can compare the effects of market volatilities on Guangzhou Automobile and Chongqing Road 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 Chongqing Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Chongqing Road.
Diversification Opportunities for Guangzhou Automobile and Chongqing Road
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guangzhou and Chongqing is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Chongqing Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Road Bridge 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 Chongqing Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Road Bridge has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Chongqing Road go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Chongqing Road
Assuming the 90 days trading horizon Guangzhou Automobile Group is expected to under-perform the Chongqing Road. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Automobile Group is 1.05 times less risky than Chongqing Road. The stock trades about -0.09 of its potential returns per unit of risk. The Chongqing Road Bridge is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 550.00 in Chongqing Road Bridge on November 3, 2024 and sell it today you would lose (5.00) from holding Chongqing Road Bridge or give up 0.91% 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. Chongqing Road Bridge
Performance |
| Timeline |
| Guangzhou Automobile |
| Chongqing Road Bridge |
Guangzhou Automobile and Chongqing Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Chongqing Road
The main advantage of trading using opposite Guangzhou Automobile and Chongqing Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Chongqing Road 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 Chongqing Road will offset losses from the drop in Chongqing Road'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 |
| Chongqing Road vs. Beijing YanDong MicroElectronic | Chongqing Road vs. Kingclean Electric Co | Chongqing Road vs. Marssenger Kitchenware Co | Chongqing Road vs. TongFu Microelectronics 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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