Correlation Between Iat Automobile and Shenzhen Dynanonic

Can any of the company-specific risk be diversified away by investing in both Iat Automobile and Shenzhen Dynanonic 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 Shenzhen Dynanonic 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 Shenzhen Dynanonic Co, you can compare the effects of market volatilities on Iat Automobile and Shenzhen Dynanonic 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 Shenzhen Dynanonic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iat Automobile and Shenzhen Dynanonic.

Diversification Opportunities for Iat Automobile and Shenzhen Dynanonic

0.79

Correlation Coefficient

Iat Automobile  Shenzhen Dynanonic

Poor diversification

The 3 months correlation between Iat and Shenzhen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Iat Automobile Technology and Shenzhen Dynanonic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Dynanonic 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 Shenzhen Dynanonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Dynanonic has no effect on the direction of Iat Automobile i.e., Iat Automobile and Shenzhen Dynanonic go up and down completely randomly.

Pair Corralation between Iat Automobile and Shenzhen Dynanonic

Assuming the 90 days trading horizon Iat Automobile is expected to generate 1.36 times less return on investment than Shenzhen Dynanonic. But when comparing it to its historical volatility, Iat Automobile Technology is 1.32 times less risky than Shenzhen Dynanonic. It trades about 0.08 of its potential returns per unit of risk. Shenzhen Dynanonic Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,321  in Shenzhen Dynanonic Co on September 27, 2024 and sell it today you would earn a total of  699.00  from holding Shenzhen Dynanonic Co or generate 21.05% return on investment over 90 days.

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

Iat Automobile Technology  vs.  Shenzhen Dynanonic Co

Iat Automobile Technology

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Iat Automobile Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Iat Automobile sustained solid returns over the last few months and may actually be approaching a breakup point.

Shenzhen Dynanonic

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Dynanonic Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Dynanonic sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iat Automobile and Shenzhen Dynanonic

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

The idea behind Iat Automobile Technology and Shenzhen Dynanonic Co 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 Transaction History module to view history of all your transactions and understand their impact on performance.