Correlation Between China Construction and Guangzhou Automobile
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By analyzing existing cross correlation between China Construction Bank and Guangzhou Automobile Group, you can compare the effects of market volatilities on China Construction 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 Construction with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Guangzhou Automobile.
Diversification Opportunities for China Construction and Guangzhou Automobile
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Guangzhou is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank 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 Construction 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 Construction Bank 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 Construction i.e., China Construction and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between China Construction and Guangzhou Automobile
Assuming the 90 days trading horizon China Construction is expected to generate 7.23 times less return on investment than Guangzhou Automobile. But when comparing it to its historical volatility, China Construction Bank is 1.3 times less risky than Guangzhou Automobile. It trades about 0.03 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Guangzhou Automobile Group
Performance |
| Timeline |
| China Construction Bank |
| Guangzhou Automobile |
China Construction and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Guangzhou Automobile
The main advantage of trading using opposite China Construction and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction 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 Construction vs. Innovative Medical Management | China Construction vs. Changjiang Publishing Media | China Construction vs. Duzhe Publishing Media | China Construction vs. Huaxia Fund Management |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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