Correlation Between Cambricon Technologies and Guangzhou Automobile
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By analyzing existing cross correlation between Cambricon Technologies Corp and Guangzhou Automobile Group, you can compare the effects of market volatilities on Cambricon Technologies 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 Cambricon Technologies with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambricon Technologies and Guangzhou Automobile.
Diversification Opportunities for Cambricon Technologies and Guangzhou Automobile
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cambricon and Guangzhou is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cambricon Technologies Corp and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Cambricon Technologies 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 Cambricon Technologies Corp 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 Cambricon Technologies i.e., Cambricon Technologies and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Cambricon Technologies and Guangzhou Automobile
Assuming the 90 days trading horizon Cambricon Technologies Corp is expected to generate 2.9 times more return on investment than Guangzhou Automobile. However, Cambricon Technologies is 2.9 times more volatile than Guangzhou Automobile Group. It trades about 0.1 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about -0.01 per unit of risk. If you would invest 10,398 in Cambricon Technologies Corp on December 4, 2024 and sell it today you would earn a total of 58,909 from holding Cambricon Technologies Corp or generate 566.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambricon Technologies Corp vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Cambricon Technologies |
| Guangzhou Automobile |
Cambricon Technologies and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambricon Technologies and Guangzhou Automobile
The main advantage of trading using opposite Cambricon Technologies and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambricon Technologies 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.| Cambricon Technologies vs. Queclink Wireless Solutions | Cambricon Technologies vs. Impulse Qingdao Health | Cambricon Technologies vs. Andon Health Co | Cambricon Technologies vs. Shandong Sinoglory Health |
| Guangzhou Automobile vs. Jointo Energy Investment | Guangzhou Automobile vs. Nanjing Vishee Medical | Guangzhou Automobile vs. Yonghui Superstores Co | Guangzhou Automobile vs. Jiangsu Yueda Investment |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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