Correlation Between Zhejiang Yinlun and Sinomach General
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By analyzing existing cross correlation between Zhejiang Yinlun Machinery and Sinomach General Machinery, you can compare the effects of market volatilities on Zhejiang Yinlun 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 Zhejiang Yinlun with a short position of Sinomach General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yinlun and Sinomach General.
Diversification Opportunities for Zhejiang Yinlun and Sinomach General
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhejiang and Sinomach is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yinlun Machinery 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 Zhejiang Yinlun 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 Zhejiang Yinlun Machinery 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 Zhejiang Yinlun i.e., Zhejiang Yinlun and Sinomach General go up and down completely randomly.
Pair Corralation between Zhejiang Yinlun and Sinomach General
Assuming the 90 days trading horizon Zhejiang Yinlun is expected to generate 16.07 times less return on investment than Sinomach General. But when comparing it to its historical volatility, Zhejiang Yinlun Machinery is 1.46 times less risky than Sinomach General. It trades about 0.0 of its potential returns per unit of risk. Sinomach General Machinery is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,341 in Sinomach General Machinery on August 29, 2024 and sell it today you would earn a total of 279.00 from holding Sinomach General Machinery or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yinlun Machinery vs. Sinomach General Machinery
Performance |
| Timeline |
| Zhejiang Yinlun Machinery |
| Sinomach General Mac |
Zhejiang Yinlun and Sinomach General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yinlun and Sinomach General
The main advantage of trading using opposite Zhejiang Yinlun and Sinomach General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yinlun 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.| Zhejiang Yinlun vs. Agricultural Bank of | Zhejiang Yinlun vs. Industrial and Commercial | Zhejiang Yinlun vs. Bank of China | Zhejiang Yinlun vs. China Construction Bank |
| Sinomach General vs. PetroChina Co Ltd | Sinomach General vs. China State Construction | Sinomach General vs. China Mobile Limited | Sinomach General vs. Industrial and Commercial |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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