Correlation Between Guangzhou Automobile and Hyzon Motors
Can any of the company-specific risk be diversified away by investing in both Guangzhou Automobile and Hyzon Motors 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 Hyzon Motors 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 Hyzon Motors, you can compare the effects of market volatilities on Guangzhou Automobile and Hyzon Motors 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 Hyzon Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Hyzon Motors.
Diversification Opportunities for Guangzhou Automobile and Hyzon Motors
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Guangzhou and Hyzon is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Hyzon Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyzon Motors 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 Hyzon Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyzon Motors has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Hyzon Motors go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Hyzon Motors
Assuming the 90 days horizon Guangzhou Automobile Group is expected to generate 1.19 times more return on investment than Hyzon Motors. However, Guangzhou Automobile is 1.19 times more volatile than Hyzon Motors. It trades about -0.02 of its potential returns per unit of risk. Hyzon Motors is currently generating about -0.06 per unit of risk. If you would invest 37.00 in Guangzhou Automobile Group on August 31, 2024 and sell it today you would lose (2.00) from holding Guangzhou Automobile Group or give up 5.41% 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. Hyzon Motors
Performance |
| Timeline |
| Guangzhou Automobile |
| Hyzon Motors |
Guangzhou Automobile and Hyzon Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Hyzon Motors
The main advantage of trading using opposite Guangzhou Automobile and Hyzon Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Hyzon Motors 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 Hyzon Motors will offset losses from the drop in Hyzon Motors' long position.| Guangzhou Automobile vs. Volkswagen AG 110 | Guangzhou Automobile vs. Stellantis NV | Guangzhou Automobile vs. Toyota Motor | Guangzhou Automobile vs. Honda Motor Co |
| Hyzon Motors vs. Mullen Automotive | Hyzon Motors vs. Canoo Inc | Hyzon Motors vs. Faraday Future Intelligent | Hyzon Motors vs. Polestar Automotive Holding |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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