Correlation Between Henzhen Zhaowei and Sinomach Automobile
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By analyzing existing cross correlation between Henzhen Zhaowei Machinery and Sinomach Automobile Co, you can compare the effects of market volatilities on Henzhen Zhaowei 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 Henzhen Zhaowei with a short position of Sinomach Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henzhen Zhaowei and Sinomach Automobile.
Diversification Opportunities for Henzhen Zhaowei and Sinomach Automobile
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Henzhen and Sinomach is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Henzhen Zhaowei Machinery and Sinomach Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach Automobile and Henzhen Zhaowei 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 Henzhen Zhaowei Machinery 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 Henzhen Zhaowei i.e., Henzhen Zhaowei and Sinomach Automobile go up and down completely randomly.
Pair Corralation between Henzhen Zhaowei and Sinomach Automobile
Assuming the 90 days trading horizon Henzhen Zhaowei Machinery is expected to generate 1.29 times more return on investment than Sinomach Automobile. However, Henzhen Zhaowei is 1.29 times more volatile than Sinomach Automobile Co. It trades about 0.04 of its potential returns per unit of risk. Sinomach Automobile Co is currently generating about -0.02 per unit of risk. If you would invest 5,228 in Henzhen Zhaowei Machinery on August 31, 2024 and sell it today you would earn a total of 2,182 from holding Henzhen Zhaowei Machinery or generate 41.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henzhen Zhaowei Machinery vs. Sinomach Automobile Co
Performance |
| Timeline |
| Henzhen Zhaowei Machinery |
| Sinomach Automobile |
Henzhen Zhaowei and Sinomach Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henzhen Zhaowei and Sinomach Automobile
The main advantage of trading using opposite Henzhen Zhaowei and Sinomach Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henzhen Zhaowei 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.| Henzhen Zhaowei vs. Cultural Investment Holdings | Henzhen Zhaowei vs. Gome Telecom Equipment | Henzhen Zhaowei vs. Bus Online Co | Henzhen Zhaowei vs. Holitech Technology Co |
| Sinomach Automobile vs. China State Construction | Sinomach Automobile vs. China Merchants Shekou | Sinomach Automobile vs. Huafa Industrial Co | Sinomach Automobile vs. China International Capital |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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