Correlation Between China State and Songz Automobile
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By analyzing existing cross correlation between China State Construction and Songz Automobile Air, you can compare the effects of market volatilities on China State and Songz 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 State with a short position of Songz Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Songz Automobile.
Diversification Opportunities for China State and Songz Automobile
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Songz is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Songz Automobile Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Songz Automobile Air and China State 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 State Construction are associated (or correlated) with Songz Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Songz Automobile Air has no effect on the direction of China State i.e., China State and Songz Automobile go up and down completely randomly.
Pair Corralation between China State and Songz Automobile
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Songz Automobile. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 1.28 times less risky than Songz Automobile. The stock trades about -0.01 of its potential returns per unit of risk. The Songz Automobile Air is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 655.00 in Songz Automobile Air on August 31, 2024 and sell it today you would earn a total of 32.00 from holding Songz Automobile Air or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Songz Automobile Air
Performance |
| Timeline |
| China State Construction |
| Songz Automobile Air |
China State and Songz Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Songz Automobile
The main advantage of trading using opposite China State and Songz Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Songz 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 Songz Automobile will offset losses from the drop in Songz Automobile's long position.| China State vs. Guangdong Wens Foodstuff | China State vs. Great Sun Foods Co | China State vs. Tianjin Pengling Rubber | China State vs. Suzhou Xingye Material |
| Songz Automobile vs. China State Construction | Songz Automobile vs. China Merchants Shekou | Songz Automobile vs. Huafa Industrial Co | Songz Automobile vs. China International Capital |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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