Correlation Between China State and Guangzhou Automobile
Specify exactly 2 symbols:
By analyzing existing cross correlation between China State Construction and Guangzhou Automobile Group, you can compare the effects of market volatilities on China State 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 China State with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Guangzhou Automobile.
Diversification Opportunities for China State and Guangzhou Automobile
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Guangzhou is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and China State 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 China State Construction 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 China State i.e., China State and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between China State and Guangzhou Automobile
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Guangzhou Automobile. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 1.3 times less risky than Guangzhou Automobile. The stock trades about -0.06 of its potential returns per unit of risk. The Guangzhou Automobile Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 789.00 in Guangzhou Automobile Group on September 2, 2024 and sell it today you would earn a total of 95.00 from holding Guangzhou Automobile Group or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Guangzhou Automobile Group
Performance |
| Timeline |
| China State Construction |
| Guangzhou Automobile |
China State and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Guangzhou Automobile
The main advantage of trading using opposite China State and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State 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.| China State vs. 159681 | China State vs. 159005 | China State vs. Loctek Ergonomic Technology | China State vs. 516220 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |