Correlation Between Grand Baoxin and Lookers Plc

Can any of the company-specific risk be diversified away by investing in both Grand Baoxin and Lookers Plc 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 Grand Baoxin and Lookers Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grand Baoxin Auto and Lookers Plc, you can compare the effects of market volatilities on Grand Baoxin and Lookers Plc 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 Grand Baoxin with a short position of Lookers Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Baoxin and Lookers Plc.

Diversification Opportunities for Grand Baoxin and Lookers Plc

-0.32

Correlation Coefficient

Grand Baoxin  Lookers Plc

Very good diversification

The 3 months correlation between Grand and Lookers is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Grand Baoxin Auto and Lookers Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lookers Plc and Grand Baoxin 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 Grand Baoxin Auto are associated (or correlated) with Lookers Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lookers Plc has no effect on the direction of Grand Baoxin i.e., Grand Baoxin and Lookers Plc go up and down completely randomly.

Pair Corralation between Grand Baoxin and Lookers Plc

If you would invest  75.00  in Lookers Plc on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Lookers Plc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Grand Baoxin Auto  vs.  Lookers Plc

Grand Baoxin Auto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Baoxin Auto has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Lookers Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lookers Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Lookers Plc is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Grand Baoxin and Lookers Plc

The main advantage of trading using opposite Grand Baoxin and Lookers Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Baoxin position performs unexpectedly, Lookers Plc 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 Lookers Plc will offset losses from the drop in Lookers Plc's long position.

The idea behind Grand Baoxin Auto and Lookers Plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.