Correlation Between Guangzhou Automobile and Allied Machinery
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By analyzing existing cross correlation between Guangzhou Automobile Group and Allied Machinery Co, you can compare the effects of market volatilities on Guangzhou Automobile and Allied Machinery 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 Allied Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Allied Machinery.
Diversification Opportunities for Guangzhou Automobile and Allied Machinery
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guangzhou and Allied is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Allied Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied 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 Allied Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Machinery has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Allied Machinery go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Allied Machinery
Assuming the 90 days trading horizon Guangzhou Automobile Group is expected to under-perform the Allied Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Automobile Group is 2.38 times less risky than Allied Machinery. The stock trades about -0.33 of its potential returns per unit of risk. The Allied Machinery Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,645 in Allied Machinery Co on October 15, 2024 and sell it today you would earn a total of 224.00 from holding Allied Machinery Co or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Allied Machinery Co
Performance |
| Timeline |
| Guangzhou Automobile |
| Allied Machinery |
Guangzhou Automobile and Allied Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Allied Machinery
The main advantage of trading using opposite Guangzhou Automobile and Allied Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Allied Machinery 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 Allied Machinery will offset losses from the drop in Allied Machinery's long position.| Guangzhou Automobile vs. Chongqing Road Bridge | Guangzhou Automobile vs. Xizi Clean Energy | Guangzhou Automobile vs. Iat Automobile Technology | Guangzhou Automobile vs. Jiugui Liquor Co |
| Allied Machinery vs. Qtone Education Group | Allied Machinery vs. Zhejiang Publishing Media | Allied Machinery vs. Beijing Kaiwen Education | Allied Machinery vs. Wuhan Yangtze Communication |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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