Correlation Between Shenzhen Fortune and Guangzhou Automobile
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By analyzing existing cross correlation between Shenzhen Fortune Trend and Guangzhou Automobile Group, you can compare the effects of market volatilities on Shenzhen Fortune 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 Shenzhen Fortune with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Fortune and Guangzhou Automobile.
Diversification Opportunities for Shenzhen Fortune and Guangzhou Automobile
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Guangzhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Fortune Trend and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Shenzhen Fortune 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 Shenzhen Fortune Trend 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 Shenzhen Fortune i.e., Shenzhen Fortune and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Shenzhen Fortune and Guangzhou Automobile
Assuming the 90 days trading horizon Shenzhen Fortune Trend is expected to generate 1.23 times more return on investment than Guangzhou Automobile. However, Shenzhen Fortune is 1.23 times more volatile than Guangzhou Automobile Group. It trades about 0.07 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about 0.07 per unit of risk. If you would invest 18,036 in Shenzhen Fortune Trend on September 13, 2024 and sell it today you would earn a total of 898.00 from holding Shenzhen Fortune Trend or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Fortune Trend vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Shenzhen Fortune Trend |
| Guangzhou Automobile |
Shenzhen Fortune and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Fortune and Guangzhou Automobile
The main advantage of trading using opposite Shenzhen Fortune and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Fortune 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.| Shenzhen Fortune vs. AUPU Home Style | Shenzhen Fortune vs. New Hope Dairy | Shenzhen Fortune vs. Xinjiang Tianrun Dairy | Shenzhen Fortune vs. Anji Foodstuff Co |
| Guangzhou Automobile vs. Cambricon Technologies Corp | Guangzhou Automobile vs. Loongson Technology Corp | Guangzhou Automobile vs. Shenzhen Fortune Trend | Guangzhou Automobile vs. Chongqing Road Bridge |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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