Correlation Between China Asset and Iat Automobile
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By analyzing existing cross correlation between China Asset Management and Iat Automobile Technology, you can compare the effects of market volatilities on China Asset and Iat 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 China Asset with a short position of Iat Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Asset and Iat Automobile.
Diversification Opportunities for China Asset and Iat Automobile
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Iat is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding China Asset Management and Iat Automobile Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iat Automobile Technology and China Asset 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 China Asset Management are associated (or correlated) with Iat Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iat Automobile Technology has no effect on the direction of China Asset i.e., China Asset and Iat Automobile go up and down completely randomly.
Pair Corralation between China Asset and Iat Automobile
Assuming the 90 days trading horizon China Asset is expected to generate 1.68 times less return on investment than Iat Automobile. But when comparing it to its historical volatility, China Asset Management is 3.1 times less risky than Iat Automobile. It trades about 0.36 of its potential returns per unit of risk. Iat Automobile Technology is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,055 in Iat Automobile Technology on November 7, 2024 and sell it today you would earn a total of 118.00 from holding Iat Automobile Technology or generate 11.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Asset Management vs. Iat Automobile Technology
Performance |
| Timeline |
| China Asset Management |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
| Iat Automobile Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
China Asset and Iat Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Asset and Iat Automobile
The main advantage of trading using opposite China Asset and Iat Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Asset position performs unexpectedly, Iat 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 Iat Automobile will offset losses from the drop in Iat Automobile's long position.The idea behind China Asset Management and Iat Automobile Technology 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.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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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