Correlation Between Guangzhou Automobile and Kunshan Guoli
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By analyzing existing cross correlation between Guangzhou Automobile Group and Kunshan Guoli Electronic, you can compare the effects of market volatilities on Guangzhou Automobile and Kunshan Guoli 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 Kunshan Guoli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Kunshan Guoli.
Diversification Opportunities for Guangzhou Automobile and Kunshan Guoli
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Kunshan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Kunshan Guoli Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunshan Guoli Electronic 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 Kunshan Guoli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunshan Guoli Electronic has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Kunshan Guoli go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Kunshan Guoli
Assuming the 90 days trading horizon Guangzhou Automobile Group is expected to under-perform the Kunshan Guoli. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Automobile Group is 2.18 times less risky than Kunshan Guoli. The stock trades about -0.03 of its potential returns per unit of risk. The Kunshan Guoli Electronic is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 6,412 in Kunshan Guoli Electronic on August 31, 2024 and sell it today you would lose (2,201) from holding Kunshan Guoli Electronic or give up 34.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Kunshan Guoli Electronic
Performance |
| Timeline |
| Guangzhou Automobile |
| Kunshan Guoli Electronic |
Guangzhou Automobile and Kunshan Guoli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Kunshan Guoli
The main advantage of trading using opposite Guangzhou Automobile and Kunshan Guoli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Kunshan Guoli 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 Kunshan Guoli will offset losses from the drop in Kunshan Guoli's long position.| Guangzhou Automobile vs. China State Construction | Guangzhou Automobile vs. China Merchants Shekou | Guangzhou Automobile vs. Huafa Industrial Co | Guangzhou Automobile vs. China International Capital |
| Kunshan Guoli vs. Xingguang Agricultural Mach | Kunshan Guoli vs. Henzhen Zhaowei Machinery | Kunshan Guoli vs. Guizhou Chanhen Chemical | Kunshan Guoli vs. Sinomach General Machinery |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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