Correlation Between Nanhua Bio and Sinomach General
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By analyzing existing cross correlation between Nanhua Bio Medicine and Sinomach General Machinery, you can compare the effects of market volatilities on Nanhua Bio and Sinomach General 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 Nanhua Bio with a short position of Sinomach General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanhua Bio and Sinomach General.
Diversification Opportunities for Nanhua Bio and Sinomach General
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nanhua and Sinomach is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nanhua Bio Medicine and Sinomach General Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach General Mac and Nanhua Bio 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 Nanhua Bio Medicine are associated (or correlated) with Sinomach General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach General Mac has no effect on the direction of Nanhua Bio i.e., Nanhua Bio and Sinomach General go up and down completely randomly.
Pair Corralation between Nanhua Bio and Sinomach General
Assuming the 90 days trading horizon Nanhua Bio is expected to generate 1.23 times less return on investment than Sinomach General. In addition to that, Nanhua Bio is 1.29 times more volatile than Sinomach General Machinery. It trades about 0.04 of its total potential returns per unit of risk. Sinomach General Machinery is currently generating about 0.07 per unit of volatility. If you would invest 1,194 in Sinomach General Machinery on September 1, 2024 and sell it today you would earn a total of 465.00 from holding Sinomach General Machinery or generate 38.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.45% |
| Values | Daily Returns |
Nanhua Bio Medicine vs. Sinomach General Machinery
Performance |
| Timeline |
| Nanhua Bio Medicine |
| Sinomach General Mac |
Nanhua Bio and Sinomach General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanhua Bio and Sinomach General
The main advantage of trading using opposite Nanhua Bio and Sinomach General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanhua Bio position performs unexpectedly, Sinomach General 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 Sinomach General will offset losses from the drop in Sinomach General's long position.| Nanhua Bio vs. Beijing Bewinner Communications | Nanhua Bio vs. Yangmei Chemical Co | Nanhua Bio vs. Liuzhou Chemical Industry | Nanhua Bio vs. Anhui Huaertai Chemical |
| Sinomach General vs. Everjoy Health Group | Sinomach General vs. FSPG Hi Tech Co | Sinomach General vs. Sichuan Jinshi Technology | Sinomach General vs. Guangdong Shenglu Telecommunication |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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