Correlation Between Zhongsheng Group and SunCar Technology

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

Diversification Opportunities for Zhongsheng Group and SunCar Technology

0.0

Correlation Coefficient

Zhongsheng Group  SunCar Technology

Pay attention - limited upside

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

Pair Corralation between Zhongsheng Group and SunCar Technology

Assuming the 90 days horizon Zhongsheng Group is expected to generate 8.22 times less return on investment than SunCar Technology. But when comparing it to its historical volatility, Zhongsheng Group Holdings is 3.0 times less risky than SunCar Technology. It trades about 0.02 of its potential returns per unit of risk. SunCar Technology Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,041  in SunCar Technology Group on October 11, 2024 and sell it today you would lose (117.00) from holding SunCar Technology Group or give up 11.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Zhongsheng Group Holdings  vs.  SunCar Technology Group

Zhongsheng Group Holdings

Risk-Adjusted Performance

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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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

SunCar Technology

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Zhongsheng Group and SunCar Technology

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

The idea behind Zhongsheng Group Holdings and SunCar Technology Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.