Correlation Between China International and Guangzhou Automobile
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By analyzing existing cross correlation between China International Capital and Guangzhou Automobile Group, you can compare the effects of market volatilities on China International 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 International with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China International and Guangzhou Automobile.
Diversification Opportunities for China International and Guangzhou Automobile
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Guangzhou is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding China International Capital 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 International 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 International Capital 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 International i.e., China International and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between China International and Guangzhou Automobile
Assuming the 90 days trading horizon China International is expected to generate 4.52 times less return on investment than Guangzhou Automobile. In addition to that, China International is 1.07 times more volatile than Guangzhou Automobile Group. It trades about 0.04 of its total potential returns per unit of risk. Guangzhou Automobile Group is currently generating about 0.22 per unit of volatility. 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China International Capital vs. Guangzhou Automobile Group
Performance |
| Timeline |
| China International |
| Guangzhou Automobile |
China International and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China International and Guangzhou Automobile
The main advantage of trading using opposite China International and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China International 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 International vs. UE Furniture Co | China International vs. CICC Fund Management | China International vs. Hunan Mendale Hometextile | China International vs. China Asset Management |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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