Correlation Between Iron Force and Sanyang
Can any of the company-specific risk be diversified away by investing in both Iron Force and Sanyang 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 Iron Force and Sanyang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iron Force Industrial and Sanyang Motor Co, you can compare the effects of market volatilities on Iron Force and Sanyang 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 Iron Force with a short position of Sanyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Force and Sanyang.
Diversification Opportunities for Iron Force and Sanyang
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Iron and Sanyang is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Iron Force Industrial and Sanyang Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyang Motor and Iron Force 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 Iron Force Industrial are associated (or correlated) with Sanyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyang Motor has no effect on the direction of Iron Force i.e., Iron Force and Sanyang go up and down completely randomly.
Pair Corralation between Iron Force and Sanyang
Assuming the 90 days trading horizon Iron Force Industrial is expected to under-perform the Sanyang. In addition to that, Iron Force is 1.09 times more volatile than Sanyang Motor Co. It trades about -0.22 of its total potential returns per unit of risk. Sanyang Motor Co is currently generating about 0.02 per unit of volatility. 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 |
Iron Force Industrial vs. Sanyang Motor Co
Performance |
| Timeline |
| Iron Force Industrial |
| Sanyang Motor |
Iron Force and Sanyang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iron Force and Sanyang
The main advantage of trading using opposite Iron Force and Sanyang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Force position performs unexpectedly, Sanyang 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 Sanyang will offset losses from the drop in Sanyang's long position.| Iron Force vs. Hota Industrial Mfg | Iron Force vs. BizLink Holding | Iron Force vs. Cub Elecparts | Iron Force vs. Hu Lane Associate |
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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 Stocks Directory module to find actively traded stocks across global markets.
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