Correlation Between SORL Auto and Lear
Can any of the company-specific risk be diversified away by investing in both SORL Auto and Lear 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 SORL Auto and Lear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SORL Auto Parts and Lear Corporation, you can compare the effects of market volatilities on SORL Auto and Lear 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 SORL Auto with a short position of Lear. Check out your portfolio center. Please also check ongoing floating volatility patterns of SORL Auto and Lear.
Diversification Opportunities for SORL Auto and Lear
Pay attention - limited upside
The 3 months correlation between SORL and Lear is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SORL Auto Parts and Lear Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lear and SORL Auto 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 SORL Auto Parts are associated (or correlated) with Lear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lear has no effect on the direction of SORL Auto i.e., SORL Auto and Lear go up and down completely randomly.
Pair Corralation between SORL Auto and Lear
If you would invest (100.00) in SORL Auto Parts on January 20, 2024 and sell it today you would earn a total of 100.00 from holding SORL Auto Parts or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
SORL Auto Parts vs. Lear Corp.
Performance |
| Timeline |
| SORL Auto Parts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lear |
SORL Auto and Lear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SORL Auto and Lear
The main advantage of trading using opposite SORL Auto and Lear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SORL Auto position performs unexpectedly, Lear 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 Lear will offset losses from the drop in Lear's long position.| SORL Auto vs. Golden Energy Offshore | SORL Auto vs. SBM Offshore NV | SORL Auto vs. NeogamesSA | SORL Auto vs. Superior Drilling Products |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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