Correlation Between Changshu Tongrun and Guangzhou Automobile
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By analyzing existing cross correlation between Changshu Tongrun Auto and Guangzhou Automobile Group, you can compare the effects of market volatilities on Changshu Tongrun 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 Changshu Tongrun with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changshu Tongrun and Guangzhou Automobile.
Diversification Opportunities for Changshu Tongrun and Guangzhou Automobile
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changshu and Guangzhou is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Changshu Tongrun Auto and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Changshu Tongrun 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 Changshu Tongrun Auto 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 Changshu Tongrun i.e., Changshu Tongrun and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Changshu Tongrun and Guangzhou Automobile
Assuming the 90 days trading horizon Changshu Tongrun Auto is expected to generate 1.54 times more return on investment than Guangzhou Automobile. However, Changshu Tongrun is 1.54 times more volatile than Guangzhou Automobile Group. It trades about 0.04 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about 0.02 per unit of risk. If you would invest 1,496 in Changshu Tongrun Auto on August 29, 2024 and sell it today you would earn a total of 237.00 from holding Changshu Tongrun Auto or generate 15.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changshu Tongrun Auto vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Changshu Tongrun Auto |
| Guangzhou Automobile |
Changshu Tongrun and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changshu Tongrun and Guangzhou Automobile
The main advantage of trading using opposite Changshu Tongrun and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changshu Tongrun 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.| Changshu Tongrun vs. Changshu Tianyin Electromechan | Changshu Tongrun vs. Changshu Ruite Electric | Changshu Tongrun vs. Changshu Automotive Trim | Changshu Tongrun vs. Zhejiang Zanyu Technology |
| Guangzhou Automobile vs. Agricultural Bank of | Guangzhou Automobile vs. Industrial and Commercial | Guangzhou Automobile vs. Bank of China | Guangzhou Automobile vs. China Construction Bank |
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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