Correlation Between Great Wall and Great Wall
Can any of the company-specific risk be diversified away by investing in both Great Wall and Great Wall 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 Great Wall and Great Wall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Wall Motor and Great Wall Motor, you can compare the effects of market volatilities on Great Wall and Great Wall 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 Great Wall with a short position of Great Wall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Wall and Great Wall.
Diversification Opportunities for Great Wall and Great Wall
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Great and Great is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Great Wall Motor and Great Wall Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Wall Motor and Great Wall 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 Great Wall Motor are associated (or correlated) with Great Wall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Wall Motor has no effect on the direction of Great Wall i.e., Great Wall and Great Wall go up and down completely randomly.
Pair Corralation between Great Wall and Great Wall
Assuming the 90 days horizon Great Wall Motor is expected to generate 1.32 times more return on investment than Great Wall. However, Great Wall is 1.32 times more volatile than Great Wall Motor. It trades about 0.04 of its potential returns per unit of risk. Great Wall Motor is currently generating about 0.04 per unit of risk. If you would invest 132.00 in Great Wall Motor on August 24, 2024 and sell it today you would earn a total of 35.00 from holding Great Wall Motor or generate 26.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 86.05% |
| Values | Daily Returns |
Great Wall Motor vs. Great Wall Motor
Performance |
| Timeline |
| Great Wall Motor |
| Great Wall Motor |
Great Wall and Great Wall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Wall and Great Wall
The main advantage of trading using opposite Great Wall and Great Wall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Wall position performs unexpectedly, Great Wall 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 Great Wall will offset losses from the drop in Great Wall's long position.| Great Wall vs. Mitsubishi Motors Corp | Great Wall vs. Geely Automobile Holdings | Great Wall vs. Hyundai Motor Co | Great Wall vs. Volkswagen AG 110 |
| Great Wall vs. Mullen Automotive | Great Wall vs. Tesla Inc | Great Wall vs. Ford Motor | Great Wall vs. Nio Class A |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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