Correlation Between Guangzhou Automobile and Dr Peng
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By analyzing existing cross correlation between Guangzhou Automobile Group and Dr Peng Telecom, you can compare the effects of market volatilities on Guangzhou Automobile and Dr Peng 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 Dr Peng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Dr Peng.
Diversification Opportunities for Guangzhou Automobile and Dr Peng
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangzhou and 600804 is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Dr Peng Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dr Peng Telecom 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 Dr Peng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dr Peng Telecom has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Dr Peng go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Dr Peng
Assuming the 90 days trading horizon Guangzhou Automobile is expected to generate 2.85 times less return on investment than Dr Peng. But when comparing it to its historical volatility, Guangzhou Automobile Group is 1.66 times less risky than Dr Peng. It trades about 0.19 of its potential returns per unit of risk. Dr Peng Telecom is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 153.00 in Dr Peng Telecom on September 1, 2024 and sell it today you would earn a total of 51.00 from holding Dr Peng Telecom or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Dr Peng Telecom
Performance |
| Timeline |
| Guangzhou Automobile |
| Dr Peng Telecom |
Guangzhou Automobile and Dr Peng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Dr Peng
The main advantage of trading using opposite Guangzhou Automobile and Dr Peng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Dr Peng 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 Dr Peng will offset losses from the drop in Dr Peng's long position.| Guangzhou Automobile vs. Anhui Huaren Health | Guangzhou Automobile vs. Shanghai Broadband Technology | Guangzhou Automobile vs. Healthcare Co | Guangzhou Automobile vs. Dezhan HealthCare Co |
| Dr Peng vs. Shandong Sinoglory Health | Dr Peng vs. Haima Automobile Group | Dr Peng vs. Guangzhou Automobile Group | Dr Peng vs. Yunnan Jianzhijia Health Chain |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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