Correlation Between Polestar Automotive and Zhongsheng Group
Can any of the company-specific risk be diversified away by investing in both Polestar Automotive and Zhongsheng Group 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 Polestar Automotive and Zhongsheng Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polestar Automotive Holding and Zhongsheng Group Holdings, you can compare the effects of market volatilities on Polestar Automotive and Zhongsheng Group 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 Polestar Automotive with a short position of Zhongsheng Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polestar Automotive and Zhongsheng Group.
Diversification Opportunities for Polestar Automotive and Zhongsheng Group
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Polestar and Zhongsheng is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Polestar Automotive Holding and Zhongsheng Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongsheng Group Holdings and Polestar Automotive 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 Polestar Automotive Holding are associated (or correlated) with Zhongsheng Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongsheng Group Holdings has no effect on the direction of Polestar Automotive i.e., Polestar Automotive and Zhongsheng Group go up and down completely randomly.
Pair Corralation between Polestar Automotive and Zhongsheng Group
Assuming the 90 days horizon Polestar Automotive Holding is expected to generate 4.39 times more return on investment than Zhongsheng Group. However, Polestar Automotive is 4.39 times more volatile than Zhongsheng Group Holdings. It trades about 0.15 of its potential returns per unit of risk. Zhongsheng Group Holdings is currently generating about -0.18 per unit of risk. If you would invest 16.00 in Polestar Automotive Holding on October 20, 2024 and sell it today you would earn a total of 7.00 from holding Polestar Automotive Holding or generate 43.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Polestar Automotive Holding vs. Zhongsheng Group Holdings
Performance |
| Timeline |
| Polestar Automotive |
| Zhongsheng Group Holdings |
Polestar Automotive and Zhongsheng Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polestar Automotive and Zhongsheng Group
The main advantage of trading using opposite Polestar Automotive and Zhongsheng Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polestar Automotive position performs unexpectedly, Zhongsheng Group 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 Zhongsheng Group will offset losses from the drop in Zhongsheng Group's long position.| Polestar Automotive vs. Lucid Group | Polestar Automotive vs. Canoo Inc | Polestar Automotive vs. Rivian Automotive | Polestar Automotive vs. Aston Martin Lagonda |
| Zhongsheng Group vs. CarMax Inc | Zhongsheng Group vs. SunCar Technology Group | Zhongsheng Group vs. U Power Limited | Zhongsheng Group vs. Camping World Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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