Correlation Between Qingling Motors and Shyft
Can any of the company-specific risk be diversified away by investing in both Qingling Motors and Shyft 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 Qingling Motors and Shyft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qingling Motors Co and The Shyft Group, you can compare the effects of market volatilities on Qingling Motors and Shyft 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 Qingling Motors with a short position of Shyft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingling Motors and Shyft.
Diversification Opportunities for Qingling Motors and Shyft
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Qingling and Shyft is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Qingling Motors Co and The Shyft Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyft Group and Qingling Motors 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 Qingling Motors Co are associated (or correlated) with Shyft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyft Group has no effect on the direction of Qingling Motors i.e., Qingling Motors and Shyft go up and down completely randomly.
Pair Corralation between Qingling Motors and Shyft
Assuming the 90 days horizon Qingling Motors Co is expected to generate 1.35 times more return on investment than Shyft. However, Qingling Motors is 1.35 times more volatile than The Shyft Group. It trades about -0.01 of its potential returns per unit of risk. The Shyft Group is currently generating about -0.02 per unit of risk. If you would invest 13.00 in Qingling Motors Co on September 14, 2024 and sell it today you would lose (6.48) from holding Qingling Motors Co or give up 49.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingling Motors Co vs. The Shyft Group
Performance |
| Timeline |
| Qingling Motors |
| Shyft Group |
Qingling Motors and Shyft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingling Motors and Shyft
The main advantage of trading using opposite Qingling Motors and Shyft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingling Motors position performs unexpectedly, Shyft 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 Shyft will offset losses from the drop in Shyft's long position.| Qingling Motors vs. Charoen Pokphand Foods | Qingling Motors vs. Shenandoah Telecommunications | Qingling Motors vs. National Beverage Corp | Qingling Motors vs. Tyson Foods |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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