Correlation Between Muyuan Foodstuff and Sinomach Automobile
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By analyzing existing cross correlation between Muyuan Foodstuff Co and Sinomach Automobile Co, you can compare the effects of market volatilities on Muyuan Foodstuff and Sinomach Automobile 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 Muyuan Foodstuff with a short position of Sinomach Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muyuan Foodstuff and Sinomach Automobile.
Diversification Opportunities for Muyuan Foodstuff and Sinomach Automobile
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Muyuan and Sinomach is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Muyuan Foodstuff Co and Sinomach Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach Automobile and Muyuan Foodstuff 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 Muyuan Foodstuff Co are associated (or correlated) with Sinomach Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach Automobile has no effect on the direction of Muyuan Foodstuff i.e., Muyuan Foodstuff and Sinomach Automobile go up and down completely randomly.
Pair Corralation between Muyuan Foodstuff and Sinomach Automobile
Assuming the 90 days trading horizon Muyuan Foodstuff Co is expected to under-perform the Sinomach Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Muyuan Foodstuff Co is 1.46 times less risky than Sinomach Automobile. The stock trades about -0.08 of its potential returns per unit of risk. The Sinomach Automobile Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 593.00 in Sinomach Automobile Co on November 7, 2024 and sell it today you would earn a total of 45.00 from holding Sinomach Automobile Co or generate 7.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Muyuan Foodstuff Co vs. Sinomach Automobile Co
Performance |
| Timeline |
| Muyuan Foodstuff |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sinomach Automobile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Muyuan Foodstuff and Sinomach Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muyuan Foodstuff and Sinomach Automobile
The main advantage of trading using opposite Muyuan Foodstuff and Sinomach Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muyuan Foodstuff position performs unexpectedly, Sinomach Automobile 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 Automobile will offset losses from the drop in Sinomach Automobile's long position.The idea behind Muyuan Foodstuff Co and Sinomach Automobile Co 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.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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