Correlation Between Iat Automobile and ZYF Lopsking

Can any of the company-specific risk be diversified away by investing in both Iat Automobile and ZYF Lopsking 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 Iat Automobile and ZYF Lopsking into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Iat Automobile Technology and ZYF Lopsking Aluminum, you can compare the effects of market volatilities on Iat Automobile and ZYF Lopsking 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 Iat Automobile with a short position of ZYF Lopsking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iat Automobile and ZYF Lopsking.

Diversification Opportunities for Iat Automobile and ZYF Lopsking

0.76

Correlation Coefficient

Iat Automobile  ZYF Lopsking

Poor diversification

The 3 months correlation between Iat and ZYF is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Iat Automobile Technology and ZYF Lopsking Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZYF Lopsking Aluminum and Iat 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 Iat Automobile Technology are associated (or correlated) with ZYF Lopsking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZYF Lopsking Aluminum has no effect on the direction of Iat Automobile i.e., Iat Automobile and ZYF Lopsking go up and down completely randomly.

Pair Corralation between Iat Automobile and ZYF Lopsking

Assuming the 90 days trading horizon Iat Automobile Technology is expected to under-perform the ZYF Lopsking. In addition to that, Iat Automobile is 1.35 times more volatile than ZYF Lopsking Aluminum. It trades about -0.03 of its total potential returns per unit of risk. ZYF Lopsking Aluminum is currently generating about -0.02 per unit of volatility. If you would invest  576.00  in ZYF Lopsking Aluminum on December 4, 2024 and sell it today you would lose (22.00) from holding ZYF Lopsking Aluminum or give up 3.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Iat Automobile Technology  vs.  ZYF Lopsking Aluminum

Iat Automobile Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iat Automobile Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Iat Automobile is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ZYF Lopsking Aluminum

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZYF Lopsking Aluminum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ZYF Lopsking is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Iat Automobile and ZYF Lopsking

The main advantage of trading using opposite Iat Automobile and ZYF Lopsking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iat Automobile position performs unexpectedly, ZYF Lopsking 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 ZYF Lopsking will offset losses from the drop in ZYF Lopsking's long position.

The idea behind Iat Automobile Technology and ZYF Lopsking Aluminum 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.