Correlation Between Allied Machinery and Guangzhou Automobile
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By analyzing existing cross correlation between Allied Machinery Co and Guangzhou Automobile Group, you can compare the effects of market volatilities on Allied Machinery 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 Allied Machinery with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Machinery and Guangzhou Automobile.
Diversification Opportunities for Allied Machinery and Guangzhou Automobile
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Allied and Guangzhou is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Allied Machinery Co and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Allied Machinery 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 Allied Machinery Co 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 Allied Machinery i.e., Allied Machinery and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Allied Machinery and Guangzhou Automobile
Assuming the 90 days trading horizon Allied Machinery Co is expected to generate 2.38 times more return on investment than Guangzhou Automobile. However, Allied Machinery is 2.38 times more volatile than Guangzhou Automobile Group. It trades about 0.15 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about -0.33 per unit of risk. If you would invest 1,645 in Allied Machinery Co on October 15, 2024 and sell it today you would earn a total of 224.00 from holding Allied Machinery Co or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Machinery Co vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Allied Machinery |
| Guangzhou Automobile |
Allied Machinery and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Machinery and Guangzhou Automobile
The main advantage of trading using opposite Allied Machinery and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Machinery 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.| Allied Machinery vs. Qtone Education Group | Allied Machinery vs. Zhejiang Publishing Media | Allied Machinery vs. Beijing Kaiwen Education | Allied Machinery vs. Wuhan Yangtze Communication |
| Guangzhou Automobile vs. Chongqing Road Bridge | Guangzhou Automobile vs. Xizi Clean Energy | Guangzhou Automobile vs. Iat Automobile Technology | Guangzhou Automobile vs. Jiugui Liquor Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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