Correlation Between Songz Automobile and Sanbo Hospital

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Can any of the company-specific risk be diversified away by investing in both Songz Automobile and Sanbo Hospital 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 Songz Automobile and Sanbo Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Songz Automobile Air and Sanbo Hospital Management, you can compare the effects of market volatilities on Songz Automobile and Sanbo Hospital 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 Songz Automobile with a short position of Sanbo Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songz Automobile and Sanbo Hospital.

Diversification Opportunities for Songz Automobile and Sanbo Hospital

SongzSanboDiversified AwaySongzSanboDiversified Away100%
0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Songz and Sanbo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Songz Automobile Air and Sanbo Hospital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanbo Hospital Management and Songz 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 Songz Automobile Air are associated (or correlated) with Sanbo Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanbo Hospital Management has no effect on the direction of Songz Automobile i.e., Songz Automobile and Sanbo Hospital go up and down completely randomly.

Pair Corralation between Songz Automobile and Sanbo Hospital

Assuming the 90 days trading horizon Songz Automobile is expected to generate 19.54 times less return on investment than Sanbo Hospital. But when comparing it to its historical volatility, Songz Automobile Air is 1.74 times less risky than Sanbo Hospital. It trades about 0.01 of its potential returns per unit of risk. Sanbo Hospital Management is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4,630  in Sanbo Hospital Management on November 19, 2024 and sell it today you would earn a total of  411.00  from holding Sanbo Hospital Management or generate 8.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Songz Automobile Air  vs.  Sanbo Hospital Management

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-50510
JavaScript chart by amCharts 3.21.15002454 301293
       Timeline  
Songz Automobile Air 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Songz Automobile Air has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Songz Automobile is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb66.26.46.66.877.27.4
Sanbo Hospital Management 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Sanbo Hospital Management are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sanbo Hospital may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb42444648505254

Songz Automobile and Sanbo Hospital Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.23-2.42-1.61-0.80.00.791.62.413.22 0.030.040.050.060.070.080.09
JavaScript chart by amCharts 3.21.15002454 301293
       Returns  

Pair Trading with Songz Automobile and Sanbo Hospital

The main advantage of trading using opposite Songz Automobile and Sanbo Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songz Automobile position performs unexpectedly, Sanbo Hospital 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 Sanbo Hospital will offset losses from the drop in Sanbo Hospital's long position.
The idea behind Songz Automobile Air and Sanbo Hospital Management 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.
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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