Correlation Between Zhongsheng Group and Inchcape Plc
Can any of the company-specific risk be diversified away by investing in both Zhongsheng Group and Inchcape 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 Zhongsheng Group and Inchcape Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhongsheng Group Holdings and Inchcape plc, you can compare the effects of market volatilities on Zhongsheng Group and Inchcape 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 Zhongsheng Group with a short position of Inchcape Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongsheng Group and Inchcape Plc.
Diversification Opportunities for Zhongsheng Group and Inchcape Plc
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zhongsheng and Inchcape is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Zhongsheng Group Holdings and Inchcape plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inchcape plc and Zhongsheng Group 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 Zhongsheng Group Holdings are associated (or correlated) with Inchcape Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inchcape plc has no effect on the direction of Zhongsheng Group i.e., Zhongsheng Group and Inchcape Plc go up and down completely randomly.
Pair Corralation between Zhongsheng Group and Inchcape Plc
Assuming the 90 days horizon Zhongsheng Group Holdings is expected to under-perform the Inchcape Plc. In addition to that, Zhongsheng Group is 3.12 times more volatile than Inchcape plc. It trades about -0.14 of its total potential returns per unit of risk. Inchcape plc is currently generating about 0.11 per unit of volatility. If you would invest 920.00 in Inchcape plc on September 24, 2024 and sell it today you would earn a total of 19.00 from holding Inchcape plc or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongsheng Group Holdings vs. Inchcape plc
Performance |
| Timeline |
| Zhongsheng Group Holdings |
| Inchcape plc |
Zhongsheng Group and Inchcape Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongsheng Group and Inchcape Plc
The main advantage of trading using opposite Zhongsheng Group and Inchcape Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongsheng Group position performs unexpectedly, Inchcape 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 Inchcape Plc will offset losses from the drop in Inchcape Plc's long position.| Zhongsheng Group vs. Copart Inc | Zhongsheng Group vs. CarMax Inc | Zhongsheng Group vs. DIeteren Group SA | Zhongsheng Group vs. Penske Automotive Group |
| Inchcape Plc vs. Copart Inc | Inchcape Plc vs. Zhongsheng Group Holdings | Inchcape Plc vs. CarMax Inc | Inchcape Plc vs. DIeteren Group SA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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