Correlation Between Guangzhou Automobile and Senci Electric
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By analyzing existing cross correlation between Guangzhou Automobile Group and Senci Electric Machinery, you can compare the effects of market volatilities on Guangzhou Automobile and Senci Electric 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 Senci Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Senci Electric.
Diversification Opportunities for Guangzhou Automobile and Senci Electric
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Senci is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Senci Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senci Electric Machinery 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 Senci Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senci Electric Machinery has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Senci Electric go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Senci Electric
Assuming the 90 days trading horizon Guangzhou Automobile is expected to generate 1.35 times less return on investment than Senci Electric. But when comparing it to its historical volatility, Guangzhou Automobile Group is 1.04 times less risky than Senci Electric. It trades about 0.08 of its potential returns per unit of risk. Senci Electric Machinery is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,322 in Senci Electric Machinery on September 27, 2024 and sell it today you would earn a total of 411.00 from holding Senci Electric Machinery or generate 31.09% 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. Senci Electric Machinery
Performance |
| Timeline |
| Guangzhou Automobile |
| Senci Electric Machinery |
Guangzhou Automobile and Senci Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Senci Electric
The main advantage of trading using opposite Guangzhou Automobile and Senci Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Senci Electric 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 Senci Electric will offset losses from the drop in Senci Electric's long position.| Guangzhou Automobile vs. New China Life | Guangzhou Automobile vs. Ming Yang Smart | Guangzhou Automobile vs. 159681 | Guangzhou Automobile vs. 159005 |
| Senci Electric vs. Industrial and Commercial | Senci Electric vs. Agricultural Bank of | Senci Electric vs. China Construction Bank | Senci Electric vs. Bank of China |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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