Correlation Between Guangzhou Automobile and Shenzhen Transsion
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By analyzing existing cross correlation between Guangzhou Automobile Group and Shenzhen Transsion Holdings, you can compare the effects of market volatilities on Guangzhou Automobile and Shenzhen Transsion 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 Shenzhen Transsion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Shenzhen Transsion.
Diversification Opportunities for Guangzhou Automobile and Shenzhen Transsion
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Shenzhen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Shenzhen Transsion Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Transsion 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 Shenzhen Transsion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Transsion has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Shenzhen Transsion go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Shenzhen Transsion
Assuming the 90 days trading horizon Guangzhou Automobile Group is expected to generate 0.93 times more return on investment than Shenzhen Transsion. However, Guangzhou Automobile Group is 1.07 times less risky than Shenzhen Transsion. It trades about 0.02 of its potential returns per unit of risk. Shenzhen Transsion Holdings is currently generating about -0.09 per unit of risk. If you would invest 848.00 in Guangzhou Automobile Group on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Guangzhou Automobile Group or generate 0.59% 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. Shenzhen Transsion Holdings
Performance |
| Timeline |
| Guangzhou Automobile |
| Shenzhen Transsion |
Guangzhou Automobile and Shenzhen Transsion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Shenzhen Transsion
The main advantage of trading using opposite Guangzhou Automobile and Shenzhen Transsion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Shenzhen Transsion 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 Shenzhen Transsion will offset losses from the drop in Shenzhen Transsion's long position.| Guangzhou Automobile vs. Agricultural Bank of | Guangzhou Automobile vs. Industrial and Commercial | Guangzhou Automobile vs. Bank of China | Guangzhou Automobile vs. China Construction Bank |
| Shenzhen Transsion vs. Keeson Technology Corp | Shenzhen Transsion vs. Holitech Technology Co | Shenzhen Transsion vs. Qingdao NovelBeam Technology | Shenzhen Transsion vs. Ye Chiu Metal |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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