Correlation Between Guangzhou Automobile and Exor NV
Can any of the company-specific risk be diversified away by investing in both Guangzhou Automobile and Exor NV at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Guangzhou Automobile and Exor NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangzhou Automobile Group and Exor NV, you can compare the effects of market volatilities on Guangzhou Automobile and Exor NV 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 Guangzhou Automobile with a short position of Exor NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Exor NV.
Diversification Opportunities for Guangzhou Automobile and Exor NV
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Guangzhou and Exor is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Exor NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exor NV and Guangzhou Automobile 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 Guangzhou Automobile Group are associated (or correlated) with Exor NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exor NV has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Exor NV go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Exor NV
Assuming the 90 days horizon Guangzhou Automobile Group is expected to generate 3.48 times more return on investment than Exor NV. However, Guangzhou Automobile is 3.48 times more volatile than Exor NV. It trades about 0.01 of its potential returns per unit of risk. Exor NV is currently generating about -0.12 per unit of risk. If you would invest 41.00 in Guangzhou Automobile Group on August 28, 2024 and sell it today you would lose (1.00) from holding Guangzhou Automobile Group or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Exor NV
Performance |
| Timeline |
| Guangzhou Automobile |
| Exor NV |
Guangzhou Automobile and Exor NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Exor NV
The main advantage of trading using opposite Guangzhou Automobile and Exor NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Exor NV 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 Exor NV will offset losses from the drop in Exor NV's long position.| Guangzhou Automobile vs. Great Wall Motor | Guangzhou Automobile vs. Dongfeng Group | Guangzhou Automobile vs. Great Wall Motor | Guangzhou Automobile vs. BAIC Motor |
| Exor NV vs. Zapp Electric Vehicles | Exor NV vs. Guangzhou Automobile Group | Exor NV vs. NFI Group | Exor NV vs. Honda Motor 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets |