Correlation Between Sanbo Hospital and Xiangyang Automobile

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Can any of the company-specific risk be diversified away by investing in both Sanbo Hospital and Xiangyang 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 Sanbo Hospital and Xiangyang Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanbo Hospital Management and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Sanbo Hospital and Xiangyang 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 Sanbo Hospital with a short position of Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanbo Hospital and Xiangyang Automobile.

Diversification Opportunities for Sanbo Hospital and Xiangyang Automobile

SanboXiangyangDiversified AwaySanboXiangyangDiversified Away100%
0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Sanbo and Xiangyang is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sanbo Hospital Management and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile and Sanbo Hospital 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 Sanbo Hospital Management are associated (or correlated) with Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Sanbo Hospital i.e., Sanbo Hospital and Xiangyang Automobile go up and down completely randomly.

Pair Corralation between Sanbo Hospital and Xiangyang Automobile

Assuming the 90 days trading horizon Sanbo Hospital is expected to generate 6.08 times less return on investment than Xiangyang Automobile. But when comparing it to its historical volatility, Sanbo Hospital Management is 1.18 times less risky than Xiangyang Automobile. It trades about 0.01 of its potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  564.00  in Xiangyang Automobile Bearing on October 31, 2024 and sell it today you would earn a total of  48.00  from holding Xiangyang Automobile Bearing or generate 8.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Sanbo Hospital Management  vs.  Xiangyang Automobile Bearing

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 0102030
JavaScript chart by amCharts 3.21.15301293 000678
       Timeline  
Sanbo Hospital Management 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sanbo Hospital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sanbo Hospital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanJan455055
Xiangyang Automobile 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Xiangyang Automobile Bearing are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xiangyang Automobile sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanJan5.566.577.58

Sanbo Hospital and Xiangyang Automobile Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.38-8.53-5.67-2.810.04762.795.678.5511.4314.31 0.0200.0250.030
JavaScript chart by amCharts 3.21.15301293 000678
       Returns  

Pair Trading with Sanbo Hospital and Xiangyang Automobile

The main advantage of trading using opposite Sanbo Hospital and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanbo Hospital position performs unexpectedly, Xiangyang 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.
The idea behind Sanbo Hospital Management and Xiangyang Automobile Bearing 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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