Correlation Between Industrial and Guangzhou Automobile
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By analyzing existing cross correlation between Industrial and Commercial and Guangzhou Automobile Group, you can compare the effects of market volatilities on Industrial and Guangzhou Automobile 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 Industrial with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Guangzhou Automobile.
Diversification Opportunities for Industrial and Guangzhou Automobile
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Industrial and Guangzhou is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Industrial 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 Industrial and Commercial are associated (or correlated) with Guangzhou Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Automobile has no effect on the direction of Industrial i.e., Industrial and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Industrial and Guangzhou Automobile
Assuming the 90 days trading horizon Industrial is expected to generate 3.73 times less return on investment than Guangzhou Automobile. But when comparing it to its historical volatility, Industrial and Commercial is 1.38 times less risky than Guangzhou Automobile. It trades about 0.06 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 860.00 in Guangzhou Automobile Group on November 27, 2024 and sell it today you would earn a total of 35.00 from holding Guangzhou Automobile Group or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Industrial and Commercial |
| Guangzhou Automobile |
Industrial and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Guangzhou Automobile
The main advantage of trading using opposite Industrial and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Guangzhou Automobile 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 Guangzhou Automobile will offset losses from the drop in Guangzhou Automobile's long position.| Industrial vs. Zhengzhou Coal Mining | Industrial vs. Tibet Huayu Mining | Industrial vs. Dhc Software Co | Industrial vs. Linewell Software Co |
| Guangzhou Automobile vs. Shanghai Yanpu Metal | Guangzhou Automobile vs. Sportsoul Co Ltd | Guangzhou Automobile vs. Chongqing Shunbo Aluminum | Guangzhou Automobile vs. Lander Sports Development |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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