Correlation Between Chin Yang and SGC Energy
Can any of the company-specific risk be diversified away by investing in both Chin Yang and SGC Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chin Yang and SGC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chin Yang Chemical and SGC Energy Co, you can compare the effects of market volatilities on Chin Yang and SGC Energy 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 Chin Yang with a short position of SGC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chin Yang and SGC Energy.
Diversification Opportunities for Chin Yang and SGC Energy
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chin and SGC is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chin Yang Chemical and SGC Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGC Energy and Chin Yang 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 Chin Yang Chemical are associated (or correlated) with SGC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGC Energy has no effect on the direction of Chin Yang i.e., Chin Yang and SGC Energy go up and down completely randomly.
Pair Corralation between Chin Yang and SGC Energy
Assuming the 90 days trading horizon Chin Yang Chemical is expected to under-perform the SGC Energy. In addition to that, Chin Yang is 1.27 times more volatile than SGC Energy Co. It trades about -0.13 of its total potential returns per unit of risk. SGC Energy Co is currently generating about -0.02 per unit of volatility. If you would invest 2,690,000 in SGC Energy Co on August 31, 2024 and sell it today you would lose (140,000) from holding SGC Energy Co or give up 5.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chin Yang Chemical vs. SGC Energy Co
Performance |
| Timeline |
| Chin Yang Chemical |
| SGC Energy |
Chin Yang and SGC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chin Yang and SGC Energy
The main advantage of trading using opposite Chin Yang and SGC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chin Yang position performs unexpectedly, SGC Energy 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 SGC Energy will offset losses from the drop in SGC Energy's long position.| Chin Yang vs. AptaBio Therapeutics | Chin Yang vs. Daewoo SBI SPAC | Chin Yang vs. Dream Security co | Chin Yang vs. Microfriend |
| SGC Energy vs. Eagle Veterinary Technology | SGC Energy vs. RFTech Co | SGC Energy vs. Dongnam Chemical Co | SGC Energy vs. Chin Yang Chemical |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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