Correlation Between Zhongsheng Group and Grand Baoxin

Can any of the company-specific risk be diversified away by investing in both Zhongsheng Group and Grand Baoxin 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 Zhongsheng Group and Grand Baoxin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zhongsheng Group Holdings and Grand Baoxin Auto, you can compare the effects of market volatilities on Zhongsheng Group and Grand Baoxin 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 Zhongsheng Group with a short position of Grand Baoxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongsheng Group and Grand Baoxin.

Diversification Opportunities for Zhongsheng Group and Grand Baoxin

0.0

Correlation Coefficient

Zhongsheng Group  Grand Baoxin

Pay attention - limited upside

The 3 months correlation between Zhongsheng and Grand is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zhongsheng Group Holdings and Grand Baoxin Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Baoxin Auto and Zhongsheng Group 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 Zhongsheng Group Holdings are associated (or correlated) with Grand Baoxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Baoxin Auto has no effect on the direction of Zhongsheng Group i.e., Zhongsheng Group and Grand Baoxin go up and down completely randomly.

Pair Corralation between Zhongsheng Group and Grand Baoxin

If you would invest  256.00  in Zhongsheng Group Holdings on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Zhongsheng Group Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Zhongsheng Group Holdings  vs.  Grand Baoxin Auto

Zhongsheng Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zhongsheng Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Zhongsheng Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Grand Baoxin Auto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Baoxin Auto has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Zhongsheng Group and Grand Baoxin

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

The idea behind Zhongsheng Group Holdings and Grand Baoxin Auto 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .