Correlation Between Sanyang and Iron Force
Can any of the company-specific risk be diversified away by investing in both Sanyang and Iron Force 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 Sanyang and Iron Force into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanyang Motor Co and Iron Force Industrial, you can compare the effects of market volatilities on Sanyang and Iron Force 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 Sanyang with a short position of Iron Force. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyang and Iron Force.
Diversification Opportunities for Sanyang and Iron Force
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sanyang and Iron is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sanyang Motor Co and Iron Force Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Force Industrial and Sanyang 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 Sanyang Motor Co are associated (or correlated) with Iron Force. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Force Industrial has no effect on the direction of Sanyang i.e., Sanyang and Iron Force go up and down completely randomly.
Pair Corralation between Sanyang and Iron Force
Assuming the 90 days trading horizon Sanyang Motor Co is expected to generate 0.92 times more return on investment than Iron Force. However, Sanyang Motor Co is 1.09 times less risky than Iron Force. It trades about 0.02 of its potential returns per unit of risk. Iron Force Industrial is currently generating about -0.22 per unit of risk. If you would invest 6,990 in Sanyang Motor Co on August 31, 2024 and sell it today you would earn a total of 20.00 from holding Sanyang Motor Co or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyang Motor Co vs. Iron Force Industrial
Performance |
| Timeline |
| Sanyang Motor |
| Iron Force Industrial |
Sanyang and Iron Force Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyang and Iron Force
The main advantage of trading using opposite Sanyang and Iron Force positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyang position performs unexpectedly, Iron Force 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 Iron Force will offset losses from the drop in Iron Force's long position.| Sanyang vs. Chaintech Technology Corp | Sanyang vs. AVerMedia Technologies | Sanyang vs. Avision | Sanyang vs. Clevo Co |
| Iron Force vs. Hota Industrial Mfg | Iron Force vs. BizLink Holding | Iron Force vs. Cub Elecparts | Iron Force vs. Hu Lane Associate |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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