Correlation Between Iat Automobile and Soochow Securities

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

Diversification Opportunities for Iat Automobile and Soochow Securities

0.47
  Correlation Coefficient

Very weak diversification

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

Pair Corralation between Iat Automobile and Soochow Securities

Assuming the 90 days trading horizon Iat Automobile Technology is expected to under-perform the Soochow Securities. In addition to that, Iat Automobile is 1.96 times more volatile than Soochow Securities Co. It trades about -0.24 of its total potential returns per unit of risk. Soochow Securities Co is currently generating about -0.31 per unit of volatility. If you would invest  825.00  in Soochow Securities Co on October 11, 2024 and sell it today you would lose (90.00) from holding Soochow Securities Co or give up 10.91% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Iat Automobile Technology  vs.  Soochow Securities Co

 Performance 
       Timeline  
Iat Automobile Technology 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Iat Automobile Technology are ranked lower than 5 (%) 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.
Soochow Securities 

Risk-Adjusted Performance

0 of 100

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

Iat Automobile and Soochow Securities Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Iat Automobile and Soochow Securities

The main advantage of trading using opposite Iat Automobile and Soochow Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iat Automobile position performs unexpectedly, Soochow Securities 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 Soochow Securities will offset losses from the drop in Soochow Securities' long position.
The idea behind Iat Automobile Technology and Soochow Securities 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.
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 Transaction History module to view history of all your transactions and understand their impact on performance.

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