Correlation Between Xiangyang Automobile and Tianneng Battery

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Xiangyang Automobile and Tianneng Battery 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 Xiangyang Automobile and Tianneng Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xiangyang Automobile Bearing and Tianneng Battery Group, you can compare the effects of market volatilities on Xiangyang Automobile and Tianneng Battery 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 Xiangyang Automobile with a short position of Tianneng Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Tianneng Battery.

Diversification Opportunities for Xiangyang Automobile and Tianneng Battery

-0.47
  Correlation Coefficient

Very good diversification

The 3 months correlation between Xiangyang and Tianneng is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Tianneng Battery Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianneng Battery and Xiangyang Automobile 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 Xiangyang Automobile Bearing are associated (or correlated) with Tianneng Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianneng Battery has no effect on the direction of Xiangyang Automobile i.e., Xiangyang Automobile and Tianneng Battery go up and down completely randomly.

Pair Corralation between Xiangyang Automobile and Tianneng Battery

Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to generate 2.35 times more return on investment than Tianneng Battery. However, Xiangyang Automobile is 2.35 times more volatile than Tianneng Battery Group. It trades about 0.02 of its potential returns per unit of risk. Tianneng Battery Group is currently generating about -0.14 per unit of risk. If you would invest  648.00  in Xiangyang Automobile Bearing on October 7, 2024 and sell it today you would earn a total of  4.00  from holding Xiangyang Automobile Bearing or generate 0.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Xiangyang Automobile Bearing  vs.  Tianneng Battery Group

 Performance 
       Timeline  
Xiangyang Automobile 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Xiangyang Automobile Bearing are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xiangyang Automobile sustained solid returns over the last few months and may actually be approaching a breakup point.
Tianneng Battery 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Tianneng Battery Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Xiangyang Automobile and Tianneng Battery Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xiangyang Automobile and Tianneng Battery

The main advantage of trading using opposite Xiangyang Automobile and Tianneng Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile position performs unexpectedly, Tianneng Battery 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 Tianneng Battery will offset losses from the drop in Tianneng Battery's long position.
The idea behind Xiangyang Automobile Bearing and Tianneng Battery Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Stocks Directory module to find actively traded stocks across global markets.

Other Complementary Tools

Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance