Correlation Between Joint Stock and Guangzhou Automobile
Can any of the company-specific risk be diversified away by investing in both Joint Stock and Guangzhou Automobile 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 Joint Stock and Guangzhou Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Joint Stock and Guangzhou Automobile Group, you can compare the effects of market volatilities on Joint Stock and Guangzhou Automobile 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 Joint Stock with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joint Stock and Guangzhou Automobile.
Diversification Opportunities for Joint Stock and Guangzhou Automobile
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Joint and Guangzhou is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Joint Stock and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Joint Stock 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 Joint Stock are associated (or correlated) with Guangzhou Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Automobile has no effect on the direction of Joint Stock i.e., Joint Stock and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Joint Stock and Guangzhou Automobile
Given the investment horizon of 90 days Joint Stock is expected to generate 0.46 times more return on investment than Guangzhou Automobile. However, Joint Stock is 2.17 times less risky than Guangzhou Automobile. It trades about 0.07 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about 0.01 per unit of risk. If you would invest 7,056 in Joint Stock on August 31, 2024 and sell it today you would earn a total of 3,584 from holding Joint Stock or generate 50.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.31% |
| Values | Daily Returns |
Joint Stock vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Joint Stock |
| Guangzhou Automobile |
Joint Stock and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Joint Stock and Guangzhou Automobile
The main advantage of trading using opposite Joint Stock and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joint Stock position performs unexpectedly, Guangzhou Automobile 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 Guangzhou Automobile will offset losses from the drop in Guangzhou Automobile's long position.| Joint Stock vs. PVH Corp | Joint Stock vs. Ecoloclean Industrs | Joint Stock vs. Siriuspoint | Joint Stock vs. Commonwealth Bank of |
| Guangzhou Automobile vs. Volkswagen AG 110 | Guangzhou Automobile vs. Stellantis NV | Guangzhou Automobile vs. Toyota Motor | Guangzhou Automobile 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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