Correlation Between 159681 and Sinosteel Engineering
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By analyzing existing cross correlation between 159681 and Sinosteel Engineering and, you can compare the effects of market volatilities on 159681 and Sinosteel Engineering 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 159681 with a short position of Sinosteel Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159681 and Sinosteel Engineering.
Diversification Opportunities for 159681 and Sinosteel Engineering
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 159681 and Sinosteel is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding 159681 and Sinosteel Engineering and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinosteel Engineering and and 159681 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 159681 are associated (or correlated) with Sinosteel Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinosteel Engineering and has no effect on the direction of 159681 i.e., 159681 and Sinosteel Engineering go up and down completely randomly.
Pair Corralation between 159681 and Sinosteel Engineering
Assuming the 90 days trading horizon 159681 is expected to generate 1.9 times more return on investment than Sinosteel Engineering. However, 159681 is 1.9 times more volatile than Sinosteel Engineering and. It trades about 0.14 of its potential returns per unit of risk. Sinosteel Engineering and is currently generating about 0.15 per unit of risk. If you would invest 66.00 in 159681 on August 29, 2024 and sell it today you would earn a total of 29.00 from holding 159681 or generate 43.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
159681 vs. Sinosteel Engineering and
Performance |
| Timeline |
| 159681 |
| Sinosteel Engineering and |
159681 and Sinosteel Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 159681 and Sinosteel Engineering
The main advantage of trading using opposite 159681 and Sinosteel Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159681 position performs unexpectedly, Sinosteel Engineering 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 Sinosteel Engineering will offset losses from the drop in Sinosteel Engineering's long position.The idea behind 159681 and Sinosteel Engineering and 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.| Sinosteel Engineering vs. PetroChina Co Ltd | Sinosteel Engineering vs. China State Construction | Sinosteel Engineering vs. China Mobile Limited | Sinosteel Engineering vs. Industrial and Commercial |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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