Correlation Between Penske Automotive and Zhongsheng Group
Can any of the company-specific risk be diversified away by investing in both Penske 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 Penske 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 Penske Automotive Group and Zhongsheng Group Holdings, you can compare the effects of market volatilities on Penske 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 Penske Automotive with a short position of Zhongsheng Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penske Automotive and Zhongsheng Group.
Diversification Opportunities for Penske Automotive and Zhongsheng Group
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Penske and Zhongsheng is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Penske Automotive Group 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 Penske 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 Penske Automotive Group 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 Penske Automotive i.e., Penske Automotive and Zhongsheng Group go up and down completely randomly.
Pair Corralation between Penske Automotive and Zhongsheng Group
Assuming the 90 days horizon Penske Automotive is expected to generate 2.59 times less return on investment than Zhongsheng Group. But when comparing it to its historical volatility, Penske Automotive Group is 3.67 times less risky than Zhongsheng Group. It trades about 0.06 of its potential returns per unit of risk. Zhongsheng Group Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Zhongsheng Group Holdings on October 12, 2024 and sell it today you would earn a total of 7.00 from holding Zhongsheng Group Holdings or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Penske Automotive Group vs. Zhongsheng Group Holdings
Performance |
| Timeline |
| Penske Automotive |
| Zhongsheng Group Holdings |
Penske Automotive and Zhongsheng Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penske Automotive and Zhongsheng Group
The main advantage of trading using opposite Penske Automotive and Zhongsheng Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penske 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.| Penske Automotive vs. CONTAGIOUS GAMING INC | Penske Automotive vs. HOCHSCHILD MINING | Penske Automotive vs. QINGCI GAMES INC | Penske Automotive vs. International Game Technology |
| Zhongsheng Group vs. Canon Marketing Japan | Zhongsheng Group vs. The Boston Beer | Zhongsheng Group vs. Auto Trader Group | Zhongsheng Group vs. China Resources Beer |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |