Correlation Between Road Environment and Guangzhou Automobile
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By analyzing existing cross correlation between Road Environment Technology and Guangzhou Automobile Group, you can compare the effects of market volatilities on Road Environment 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 Road Environment with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Road Environment and Guangzhou Automobile.
Diversification Opportunities for Road Environment and Guangzhou Automobile
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Road and Guangzhou is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Road Environment Technology and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Road Environment 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 Road Environment Technology 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 Road Environment i.e., Road Environment and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Road Environment and Guangzhou Automobile
Assuming the 90 days trading horizon Road Environment Technology is expected to generate 1.64 times more return on investment than Guangzhou Automobile. However, Road Environment is 1.64 times more volatile than Guangzhou Automobile Group. It trades about -0.13 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 1,424 in Road Environment Technology on October 15, 2024 and sell it today you would lose (141.00) from holding Road Environment Technology or give up 9.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Road Environment Technology vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Road Environment Tec |
| Guangzhou Automobile |
Road Environment and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Road Environment and Guangzhou Automobile
The main advantage of trading using opposite Road Environment and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Road Environment 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.| Road Environment vs. Youyou Foods Co | Road Environment vs. Zoy Home Furnishing | Road Environment vs. Luolai Home Textile | Road Environment vs. AUPU Home Style |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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