Correlation Between SanDi Properties and Sanyang
Can any of the company-specific risk be diversified away by investing in both SanDi Properties and Sanyang 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 SanDi Properties and Sanyang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SanDi Properties Co and Sanyang Motor Co, you can compare the effects of market volatilities on SanDi Properties and Sanyang 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 SanDi Properties with a short position of Sanyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of SanDi Properties and Sanyang.
Diversification Opportunities for SanDi Properties and Sanyang
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SanDi and Sanyang is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SanDi Properties Co and Sanyang Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyang Motor and SanDi Properties 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 SanDi Properties Co are associated (or correlated) with Sanyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyang Motor has no effect on the direction of SanDi Properties i.e., SanDi Properties and Sanyang go up and down completely randomly.
Pair Corralation between SanDi Properties and Sanyang
Assuming the 90 days trading horizon SanDi Properties Co is expected to under-perform the Sanyang. In addition to that, SanDi Properties is 2.11 times more volatile than Sanyang Motor Co. It trades about -0.08 of its total potential returns per unit of risk. Sanyang Motor Co is currently generating about 0.02 per unit of volatility. If you would invest 6,990 in Sanyang Motor Co on August 31, 2024 and sell it today you would earn a total of 20.00 from holding Sanyang Motor Co or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SanDi Properties Co vs. Sanyang Motor Co
Performance |
| Timeline |
| SanDi Properties |
| Sanyang Motor |
SanDi Properties and Sanyang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SanDi Properties and Sanyang
The main advantage of trading using opposite SanDi Properties and Sanyang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SanDi Properties position performs unexpectedly, Sanyang 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 Sanyang will offset losses from the drop in Sanyang's long position.| SanDi Properties vs. Advancetek Enterprise Co | SanDi Properties vs. I Hwa Industrial Co | SanDi Properties vs. Carnival Industrial Corp | SanDi Properties vs. Tung Ho Textile |
| Sanyang vs. Chaintech Technology Corp | Sanyang vs. AVerMedia Technologies | Sanyang vs. Avision | Sanyang vs. Clevo Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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