Correlation Between Qingling Motors and Shyft

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

By analyzing existing cross correlation between Qingling Motors Co and The Shyft Group, you can compare the effects of market volatilities on Qingling Motors and Shyft 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 Qingling Motors with a short position of Shyft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingling Motors and Shyft.

Diversification Opportunities for Qingling Motors and Shyft

-0.23

Correlation Coefficient

Qingling Motors  Shyft

Very good diversification

The 3 months correlation between Qingling and Shyft is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Qingling Motors Co and The Shyft Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyft Group and Qingling Motors 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 Qingling Motors Co are associated (or correlated) with Shyft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyft Group has no effect on the direction of Qingling Motors i.e., Qingling Motors and Shyft go up and down completely randomly.

Pair Corralation between Qingling Motors and Shyft

Assuming the 90 days horizon Qingling Motors Co is expected to generate 0.91 times more return on investment than Shyft. However, Qingling Motors Co is 1.1 times less risky than Shyft. It trades about 0.04 of its potential returns per unit of risk. The Shyft Group is currently generating about 0.03 per unit of risk. If you would invest  5.68  in Qingling Motors Co on September 29, 2024 and sell it today you would earn a total of  0.34  from holding Qingling Motors Co or generate 5.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Qingling Motors Co  vs.  The Shyft Group

Qingling Motors

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Qingling Motors Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Qingling Motors may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Shyft Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Shyft Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Shyft is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Qingling Motors and Shyft

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

The idea behind Qingling Motors Co and The Shyft 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.