Correlation Between Songz Automobile and Weihai Honglin
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By analyzing existing cross correlation between Songz Automobile Air and Weihai Honglin Electronic, you can compare the effects of market volatilities on Songz Automobile and Weihai Honglin 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 Songz Automobile with a short position of Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songz Automobile and Weihai Honglin.
Diversification Opportunities for Songz Automobile and Weihai Honglin
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Songz and Weihai is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Songz Automobile Air and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic and Songz Automobile 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 Songz Automobile Air are associated (or correlated) with Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of Songz Automobile i.e., Songz Automobile and Weihai Honglin go up and down completely randomly.
Pair Corralation between Songz Automobile and Weihai Honglin
Assuming the 90 days trading horizon Songz Automobile is expected to generate 2.48 times less return on investment than Weihai Honglin. But when comparing it to its historical volatility, Songz Automobile Air is 1.16 times less risky than Weihai Honglin. It trades about 0.01 of its potential returns per unit of risk. Weihai Honglin Electronic is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,396 in Weihai Honglin Electronic on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Weihai Honglin Electronic or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songz Automobile Air vs. Weihai Honglin Electronic
Performance |
| Timeline |
| Songz Automobile Air |
| Weihai Honglin Electronic |
Songz Automobile and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songz Automobile and Weihai Honglin
The main advantage of trading using opposite Songz Automobile and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songz Automobile position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.| Songz Automobile vs. Lutian Machinery Co | Songz Automobile vs. PetroChina Co Ltd | Songz Automobile vs. Bank of China | Songz Automobile vs. Gansu Jiu Steel |
| Weihai Honglin vs. Agricultural Bank of | Weihai Honglin vs. Industrial and Commercial | Weihai Honglin vs. Bank of China | Weihai Honglin vs. PetroChina Co Ltd |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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