Correlation Between Iat Automobile and China Publishing

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

Diversification Opportunities for Iat Automobile and China Publishing

0.09

Correlation Coefficient

Iat Automobile  China Publishing

Significant diversification

The 3 months correlation between Iat and China is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Iat Automobile Technology and China Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Publishing Media 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 China Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Publishing Media has no effect on the direction of Iat Automobile i.e., Iat Automobile and China Publishing go up and down completely randomly.

Pair Corralation between Iat Automobile and China Publishing

Assuming the 90 days trading horizon Iat Automobile Technology is expected to generate 1.7 times more return on investment than China Publishing. However, Iat Automobile is 1.7 times more volatile than China Publishing Media. It trades about 0.08 of its potential returns per unit of risk. China Publishing Media is currently generating about -0.13 per unit of risk. If you would invest  1,145  in Iat Automobile Technology on December 23, 2024 and sell it today you would earn a total of  148.00  from holding Iat Automobile Technology or generate 12.93% return on investment over 90 days.

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

Iat Automobile Technology  vs.  China Publishing Media

Iat Automobile Technology

Risk-Adjusted Performance

Modest

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.

China Publishing Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Publishing Media 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Iat Automobile and China Publishing

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

The idea behind Iat Automobile Technology and China Publishing Media 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.