Correlation Between Guangzhou Automobile and Nissan
Can any of the company-specific risk be diversified away by investing in both Guangzhou Automobile and Nissan 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 Nissan 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 Nissan Motor Co, you can compare the effects of market volatilities on Guangzhou Automobile and Nissan 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 Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Automobile and Nissan.
Diversification Opportunities for Guangzhou Automobile and Nissan
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Guangzhou and Nissan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Automobile Group and Nissan Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nissan Motor 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 Nissan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nissan Motor has no effect on the direction of Guangzhou Automobile i.e., Guangzhou Automobile and Nissan go up and down completely randomly.
Pair Corralation between Guangzhou Automobile and Nissan
If you would invest 39.00 in Guangzhou Automobile Group on November 18, 2024 and sell it today you would earn a total of 1.00 from holding Guangzhou Automobile Group or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Guangzhou Automobile Group vs. Nissan Motor Co
Performance |
| Timeline |
| Guangzhou Automobile |
| Nissan Motor |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Guangzhou Automobile and Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Automobile and Nissan
The main advantage of trading using opposite Guangzhou Automobile and Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Automobile position performs unexpectedly, Nissan 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 Nissan will offset losses from the drop in Nissan'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 |
| Nissan vs. Honda Motor Co | Nissan vs. Toyota Motor | Nissan vs. Hyundai Motor Co | Nissan vs. Mazda Motor Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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