Correlation Between Group 1 and Grand Baoxin
Can any of the company-specific risk be diversified away by investing in both Group 1 and Grand Baoxin 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 Group 1 and Grand Baoxin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group 1 Automotive and Grand Baoxin Auto, you can compare the effects of market volatilities on Group 1 and Grand Baoxin 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 Group 1 with a short position of Grand Baoxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 1 and Grand Baoxin.
Diversification Opportunities for Group 1 and Grand Baoxin
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Group and Grand is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Group 1 Automotive and Grand Baoxin Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Baoxin Auto and Group 1 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 Group 1 Automotive are associated (or correlated) with Grand Baoxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Baoxin Auto has no effect on the direction of Group 1 i.e., Group 1 and Grand Baoxin go up and down completely randomly.
Pair Corralation between Group 1 and Grand Baoxin
If you would invest 41,846 in Group 1 Automotive on October 22, 2024 and sell it today you would earn a total of 2,920 from holding Group 1 Automotive or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Group 1 Automotive vs. Grand Baoxin Auto
Performance |
| Timeline |
| Group 1 Automotive |
| Grand Baoxin Auto |
Group 1 and Grand Baoxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 1 and Grand Baoxin
The main advantage of trading using opposite Group 1 and Grand Baoxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 1 position performs unexpectedly, Grand Baoxin 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 Grand Baoxin will offset losses from the drop in Grand Baoxin's long position.| Group 1 vs. Penske Automotive Group | Group 1 vs. Lithia Motors | Group 1 vs. AutoNation | Group 1 vs. Asbury Automotive Group |
| Grand Baoxin vs. Copart Inc | Grand Baoxin vs. Zhongsheng Group Holdings | Grand Baoxin vs. Zhongsheng Group Holdings | Grand Baoxin vs. CarMax Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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