Correlation Between EHi Car and SORL Auto
Can any of the company-specific risk be diversified away by investing in both EHi Car and SORL Auto 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 EHi Car and SORL Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHi Car Services and SORL Auto Parts, you can compare the effects of market volatilities on EHi Car and SORL Auto 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 EHi Car with a short position of SORL Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHi Car and SORL Auto.
Diversification Opportunities for EHi Car and SORL Auto
Pay attention - limited upside
The 3 months correlation between EHi and SORL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EHi Car Services and SORL Auto Parts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SORL Auto Parts and EHi Car 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 EHi Car Services are associated (or correlated) with SORL Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SORL Auto Parts has no effect on the direction of EHi Car i.e., EHi Car and SORL Auto go up and down completely randomly.
Pair Corralation between EHi Car and SORL Auto
If you would invest (100.00) in SORL Auto Parts on January 25, 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 | 100.0% |
| Values | Daily Returns |
EHi Car Services vs. SORL Auto Parts
Performance |
| Timeline |
| EHi Car Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SORL Auto Parts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EHi Car and SORL Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHi Car and SORL Auto
The main advantage of trading using opposite EHi Car and SORL Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHi Car position performs unexpectedly, SORL Auto 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 SORL Auto will offset losses from the drop in SORL Auto's long position.| EHi Car vs. Jacobs Solutions | EHi Car vs. Papaya Growth Opportunity | EHi Car vs. Sphere Entertainment Co | EHi Car vs. Electrovaya Common Shares |
| SORL Auto vs. Cementos Pacasmayo SAA | SORL Auto vs. Barrick Gold Corp | SORL Auto vs. Alto Ingredients | SORL Auto vs. HNI Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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