Correlation Between Chengdu Xinzhu and Guangzhou Automobile
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By analyzing existing cross correlation between Chengdu Xinzhu RoadBridge and Guangzhou Automobile Group, you can compare the effects of market volatilities on Chengdu Xinzhu 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 Chengdu Xinzhu with a short position of Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Xinzhu and Guangzhou Automobile.
Diversification Opportunities for Chengdu Xinzhu and Guangzhou Automobile
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chengdu and Guangzhou is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Xinzhu RoadBridge and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile and Chengdu Xinzhu 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 Chengdu Xinzhu RoadBridge 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 Chengdu Xinzhu i.e., Chengdu Xinzhu and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Chengdu Xinzhu and Guangzhou Automobile
Assuming the 90 days trading horizon Chengdu Xinzhu RoadBridge is expected to generate 1.58 times more return on investment than Guangzhou Automobile. However, Chengdu Xinzhu is 1.58 times more volatile than Guangzhou Automobile Group. It trades about 0.02 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about -0.03 per unit of risk. If you would invest 526.00 in Chengdu Xinzhu RoadBridge on October 25, 2024 and sell it today you would earn a total of 13.00 from holding Chengdu Xinzhu RoadBridge or generate 2.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Chengdu Xinzhu RoadBridge vs. Guangzhou Automobile Group
Performance |
Timeline |
Chengdu Xinzhu RoadBridge |
Guangzhou Automobile |
Chengdu Xinzhu and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chengdu Xinzhu and Guangzhou Automobile
The main advantage of trading using opposite Chengdu Xinzhu and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Xinzhu 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.Chengdu Xinzhu vs. Kweichow Moutai Co | Chengdu Xinzhu vs. Contemporary Amperex Technology | Chengdu Xinzhu vs. G bits Network Technology | Chengdu Xinzhu vs. Beijing Roborock Technology |
Guangzhou Automobile vs. China Longyuan Power | Guangzhou Automobile vs. PetroChina Co Ltd | Guangzhou Automobile vs. Guangxi Guiguan Electric | Guangzhou Automobile vs. Yantai North Andre |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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