Correlation Between Dongjiang Environmental and Sinomach General
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By analyzing existing cross correlation between Dongjiang Environmental Co and Sinomach General Machinery, you can compare the effects of market volatilities on Dongjiang Environmental 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 Dongjiang Environmental with a short position of Sinomach General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjiang Environmental and Sinomach General.
Diversification Opportunities for Dongjiang Environmental and Sinomach General
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongjiang and Sinomach is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dongjiang Environmental Co 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 Dongjiang Environmental 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 Dongjiang Environmental Co 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 Dongjiang Environmental i.e., Dongjiang Environmental and Sinomach General go up and down completely randomly.
Pair Corralation between Dongjiang Environmental and Sinomach General
Assuming the 90 days trading horizon Dongjiang Environmental is expected to generate 4.24 times less return on investment than Sinomach General. But when comparing it to its historical volatility, Dongjiang Environmental Co is 1.24 times less risky than Sinomach General. It trades about 0.01 of its potential returns per unit of risk. Sinomach General Machinery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,558 in Sinomach General Machinery on September 4, 2024 and sell it today you would earn a total of 123.00 from holding Sinomach General Machinery or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongjiang Environmental Co vs. Sinomach General Machinery
Performance |
| Timeline |
| Dongjiang Environmental |
| Sinomach General Mac |
Dongjiang Environmental and Sinomach General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongjiang Environmental and Sinomach General
The main advantage of trading using opposite Dongjiang Environmental and Sinomach General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjiang Environmental 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.| Dongjiang Environmental vs. Ming Yang Smart | Dongjiang Environmental vs. 159681 | Dongjiang Environmental vs. 159005 | Dongjiang Environmental vs. 516220 |
| Sinomach General vs. Shanghai Action Education | Sinomach General vs. China Life Insurance | Sinomach General vs. Eastroc Beverage Group | Sinomach General vs. Fujian Anjoy Foods |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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