Correlation Between CIMC Vehicles and Iat Automobile

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

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

Diversification Opportunities for CIMC Vehicles and Iat Automobile

-0.1

Correlation Coefficient

CIMC Vehicles  Iat Automobile

Good diversification

The 3 months correlation between CIMC and Iat is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CIMC Vehicles Co and Iat Automobile Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iat Automobile Technology and CIMC Vehicles 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 CIMC Vehicles Co are associated (or correlated) with Iat Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iat Automobile Technology has no effect on the direction of CIMC Vehicles i.e., CIMC Vehicles and Iat Automobile go up and down completely randomly.

Pair Corralation between CIMC Vehicles and Iat Automobile

Assuming the 90 days trading horizon CIMC Vehicles Co is expected to under-perform the Iat Automobile. But the stock apears to be less risky and, when comparing its historical volatility, CIMC Vehicles Co is 2.57 times less risky than Iat Automobile. The stock trades about -0.06 of its potential returns per unit of risk. The Iat Automobile Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CIMC Vehicles Co  vs.  Iat Automobile Technology

CIMC Vehicles

Risk-Adjusted Performance

Very Weak

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

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.

Pair Trading with CIMC Vehicles and Iat Automobile

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

The idea behind CIMC Vehicles Co and Iat Automobile Technology 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.