Correlation Between AB Volvo and Qingling Motors
Can any of the company-specific risk be diversified away by investing in both AB Volvo and Qingling Motors 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 AB Volvo and Qingling Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Volvo and Qingling Motors Co, you can compare the effects of market volatilities on AB Volvo and Qingling Motors 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 AB Volvo with a short position of Qingling Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Volvo and Qingling Motors.
Diversification Opportunities for AB Volvo and Qingling Motors
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VOL3 and Qingling is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding AB Volvo and Qingling Motors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingling Motors and AB Volvo 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 AB Volvo are associated (or correlated) with Qingling Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingling Motors has no effect on the direction of AB Volvo i.e., AB Volvo and Qingling Motors go up and down completely randomly.
Pair Corralation between AB Volvo and Qingling Motors
Assuming the 90 days trading horizon AB Volvo is expected to generate 0.5 times more return on investment than Qingling Motors. However, AB Volvo is 2.01 times less risky than Qingling Motors. It trades about 0.11 of its potential returns per unit of risk. Qingling Motors Co is currently generating about 0.03 per unit of risk. If you would invest 2,204 in AB Volvo on November 3, 2024 and sell it today you would earn a total of 482.00 from holding AB Volvo or generate 21.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Volvo vs. Qingling Motors Co
Performance |
| Timeline |
| AB Volvo |
| Qingling Motors |
AB Volvo and Qingling Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Volvo and Qingling Motors
The main advantage of trading using opposite AB Volvo and Qingling Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Volvo position performs unexpectedly, Qingling Motors 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 Qingling Motors will offset losses from the drop in Qingling Motors' long position.| AB Volvo vs. Zijin Mining Group | AB Volvo vs. American Airlines Group | AB Volvo vs. International Consolidated Airlines | AB Volvo vs. GRIFFIN MINING LTD |
| Qingling Motors vs. AB Volvo | Qingling Motors vs. PACCAR Inc | Qingling Motors vs. KION Group AG | Qingling Motors vs. Sinotruk Limited |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |