Correlation Between Guangzhou Automobile and Ningbo Jintian
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By analyzing existing cross correlation between Guangzhou Automobile Group and Ningbo Jintian Copper, you can compare the effects of market volatilities on Guangzhou Automobile and Ningbo Jintian 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 Jintian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Ningbo Jintian.
Diversification Opportunities for Guangzhou Automobile and Ningbo Jintian
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Ningbo is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Ningbo Jintian Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Jintian Copper 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 Jintian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Jintian Copper has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Ningbo Jintian go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Ningbo Jintian
Assuming the 90 days trading horizon Guangzhou Automobile Group is expected to generate 0.91 times more return on investment than Ningbo Jintian. However, Guangzhou Automobile Group is 1.1 times less risky than Ningbo Jintian. It trades about 0.03 of its potential returns per unit of risk. Ningbo Jintian Copper is currently generating about 0.02 per unit of risk. If you would invest 877.00 in Guangzhou Automobile Group on September 12, 2024 and sell it today you would earn a total of 87.00 from holding Guangzhou Automobile Group or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Ningbo Jintian Copper
Performance |
| Timeline |
| Guangzhou Automobile |
| Ningbo Jintian Copper |
Guangzhou Automobile and Ningbo Jintian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Ningbo Jintian
The main advantage of trading using opposite Guangzhou Automobile and Ningbo Jintian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Ningbo Jintian 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 Jintian will offset losses from the drop in Ningbo Jintian's long position.| Guangzhou Automobile vs. Lutian Machinery Co | Guangzhou Automobile vs. PetroChina Co Ltd | Guangzhou Automobile vs. Bank of China | Guangzhou Automobile vs. Gansu Jiu Steel |
| Ningbo Jintian vs. Guangzhou Automobile Group | Ningbo Jintian vs. Anhui Jianghuai Automobile | Ningbo Jintian vs. Changchun Faway Automobile | Ningbo Jintian vs. Chengdu Xinzhu RoadBridge |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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