Correlation Between Qingdao Haier and Guangzhou Automobile
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By analyzing existing cross correlation between Qingdao Haier Biomedical and Guangzhou Automobile Group, you can compare the effects of market volatilities on Qingdao Haier 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 Qingdao Haier with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Haier and Guangzhou Automobile.
Diversification Opportunities for Qingdao Haier and Guangzhou Automobile
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Qingdao and Guangzhou is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Haier Biomedical and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Qingdao Haier 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 Qingdao Haier Biomedical 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 Qingdao Haier i.e., Qingdao Haier and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Qingdao Haier and Guangzhou Automobile
Assuming the 90 days trading horizon Qingdao Haier Biomedical is expected to generate 1.4 times more return on investment than Guangzhou Automobile. However, Qingdao Haier is 1.4 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 -0.16 per unit of risk. If you would invest 3,399 in Qingdao Haier Biomedical on January 4, 2025 and sell it today you would earn a total of 43.00 from holding Qingdao Haier Biomedical or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Haier Biomedical vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Qingdao Haier Biomedical |
| Guangzhou Automobile |
Qingdao Haier and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Haier and Guangzhou Automobile
The main advantage of trading using opposite Qingdao Haier and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Haier 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.| Qingdao Haier vs. Thunder Software Technology | Qingdao Haier vs. Bangyan Technology Co | Qingdao Haier vs. Northking Information Technology | Qingdao Haier vs. BrightGene Bio Medical |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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