Correlation Between Zhongsheng Group and AutoNation
Can any of the company-specific risk be diversified away by investing in both Zhongsheng Group and AutoNation 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 AutoNation 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 AutoNation, you can compare the effects of market volatilities on Zhongsheng Group and AutoNation 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 AutoNation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongsheng Group and AutoNation.
Diversification Opportunities for Zhongsheng Group and AutoNation
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhongsheng and AutoNation is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Zhongsheng Group Holdings and AutoNation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoNation 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 AutoNation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoNation has no effect on the direction of Zhongsheng Group i.e., Zhongsheng Group and AutoNation go up and down completely randomly.
Pair Corralation between Zhongsheng Group and AutoNation
Assuming the 90 days horizon Zhongsheng Group Holdings is expected to under-perform the AutoNation. In addition to that, Zhongsheng Group is 1.79 times more volatile than AutoNation. It trades about -0.88 of its total potential returns per unit of risk. AutoNation is currently generating about 0.1 per unit of volatility. If you would invest 16,505 in AutoNation on October 13, 2024 and sell it today you would earn a total of 295.00 from holding AutoNation or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongsheng Group Holdings vs. AutoNation
Performance |
| Timeline |
| Zhongsheng Group Holdings |
| AutoNation |
Zhongsheng Group and AutoNation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongsheng Group and AutoNation
The main advantage of trading using opposite Zhongsheng Group and AutoNation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongsheng Group position performs unexpectedly, AutoNation 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 AutoNation will offset losses from the drop in AutoNation's long position.| Zhongsheng Group vs. Canon Marketing Japan | Zhongsheng Group vs. The Boston Beer | Zhongsheng Group vs. Auto Trader Group | Zhongsheng Group vs. China Resources Beer |
| AutoNation vs. ARDAGH METAL PACDL 0001 | AutoNation vs. De Grey Mining | AutoNation vs. Align Technology | AutoNation vs. Harmony Gold Mining |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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