Correlation Between Seaboard and Zhongsheng Group
Can any of the company-specific risk be diversified away by investing in both Seaboard 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 Seaboard and Zhongsheng Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seaboard and Zhongsheng Group Holdings, you can compare the effects of market volatilities on Seaboard 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 Seaboard with a short position of Zhongsheng Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seaboard and Zhongsheng Group.
Diversification Opportunities for Seaboard and Zhongsheng Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seaboard and Zhongsheng is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Seaboard 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 Seaboard 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 Seaboard 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 Seaboard i.e., Seaboard and Zhongsheng Group go up and down completely randomly.
Pair Corralation between Seaboard and Zhongsheng Group
Assuming the 90 days horizon Seaboard is expected to under-perform the Zhongsheng Group. But the stock apears to be less risky and, when comparing its historical volatility, Seaboard is 4.75 times less risky than Zhongsheng Group. The stock trades about -0.19 of its potential returns per unit of risk. The Zhongsheng Group Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 141.00 in Zhongsheng Group Holdings on August 31, 2024 and sell it today you would earn a total of 45.00 from holding Zhongsheng Group Holdings or generate 31.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Seaboard vs. Zhongsheng Group Holdings
Performance |
| Timeline |
| Seaboard |
| Zhongsheng Group Holdings |
Seaboard and Zhongsheng Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seaboard and Zhongsheng Group
The main advantage of trading using opposite Seaboard and Zhongsheng Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seaboard 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.| Seaboard vs. IMPERIAL TOBACCO | Seaboard vs. Jacquet Metal Service | Seaboard vs. Ameriprise Financial | Seaboard vs. GRIFFIN MINING LTD |
| Zhongsheng Group vs. COMBA TELECOM SYST | Zhongsheng Group vs. Iridium Communications | Zhongsheng Group vs. Gamma Communications plc | Zhongsheng Group vs. Consolidated Communications 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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