Correlation Between Guangzhou Automobile and Tianjin Silvery
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By analyzing existing cross correlation between Guangzhou Automobile Group and Tianjin Silvery Dragon, you can compare the effects of market volatilities on Guangzhou Automobile and Tianjin Silvery 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 Tianjin Silvery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Tianjin Silvery.
Diversification Opportunities for Guangzhou Automobile and Tianjin Silvery
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Tianjin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Tianjin Silvery Dragon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Silvery Dragon 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 Tianjin Silvery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Silvery Dragon has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Tianjin Silvery go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Tianjin Silvery
Assuming the 90 days trading horizon Guangzhou Automobile Group is expected to generate 0.56 times more return on investment than Tianjin Silvery. However, Guangzhou Automobile Group is 1.78 times less risky than Tianjin Silvery. It trades about -0.29 of its potential returns per unit of risk. Tianjin Silvery Dragon is currently generating about -0.25 per unit of risk. If you would invest 955.00 in Guangzhou Automobile Group on October 16, 2024 and sell it today you would lose (117.00) from holding Guangzhou Automobile Group or give up 12.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Tianjin Silvery Dragon
Performance |
| Timeline |
| Guangzhou Automobile |
| Tianjin Silvery Dragon |
Guangzhou Automobile and Tianjin Silvery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Tianjin Silvery
The main advantage of trading using opposite Guangzhou Automobile and Tianjin Silvery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Tianjin Silvery 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 Tianjin Silvery will offset losses from the drop in Tianjin Silvery's long position.| Guangzhou Automobile vs. Jinsanjiang Silicon Material | Guangzhou Automobile vs. Kangxin New Materials | Guangzhou Automobile vs. Western Metal Materials | Guangzhou Automobile vs. Cangzhou Mingzhu Plastic |
| Tianjin Silvery vs. Fuda Alloy Materials | Tianjin Silvery vs. Guangzhou Automobile Group | Tianjin Silvery vs. Suzhou Xingye Material | Tianjin Silvery vs. Kangxin New Materials |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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