Correlation Between 159681 and Sinomach Automobile
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By analyzing existing cross correlation between 159681 and Sinomach Automobile Co, you can compare the effects of market volatilities on 159681 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 159681 with a short position of Sinomach Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159681 and Sinomach Automobile.
Diversification Opportunities for 159681 and Sinomach Automobile
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 159681 and Sinomach is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding 159681 and Sinomach Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach Automobile 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 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 159681 i.e., 159681 and Sinomach Automobile go up and down completely randomly.
Pair Corralation between 159681 and Sinomach Automobile
Assuming the 90 days trading horizon 159681 is expected to generate 1.91 times more return on investment than Sinomach Automobile. However, 159681 is 1.91 times more volatile than Sinomach Automobile Co. It trades about 0.15 of its potential returns per unit of risk. Sinomach Automobile Co is currently generating about 0.12 per unit of risk. If you would invest 66.00 in 159681 on September 3, 2024 and sell it today you would earn a total of 32.00 from holding 159681 or generate 48.48% 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. Sinomach Automobile Co
Performance |
| Timeline |
| 159681 |
| Sinomach Automobile |
159681 and Sinomach Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 159681 and Sinomach Automobile
The main advantage of trading using opposite 159681 and Sinomach Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159681 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 159681 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.| Sinomach Automobile vs. PetroChina Co Ltd | Sinomach Automobile vs. China Mobile Limited | Sinomach Automobile vs. Industrial and Commercial | Sinomach Automobile vs. China Life Insurance |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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