Correlation Between China Man and Sinher Technology
Can any of the company-specific risk be diversified away by investing in both China Man and Sinher Technology 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 China Man and Sinher Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Man Made Fiber and Sinher Technology, you can compare the effects of market volatilities on China Man and Sinher Technology 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 China Man with a short position of Sinher Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Man and Sinher Technology.
Diversification Opportunities for China Man and Sinher Technology
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Sinher is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding China Man Made Fiber and Sinher Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinher Technology and China Man 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 China Man Made Fiber are associated (or correlated) with Sinher Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinher Technology has no effect on the direction of China Man i.e., China Man and Sinher Technology go up and down completely randomly.
Pair Corralation between China Man and Sinher Technology
Assuming the 90 days trading horizon China Man Made Fiber is expected to generate 1.48 times more return on investment than Sinher Technology. However, China Man is 1.48 times more volatile than Sinher Technology. It trades about 0.01 of its potential returns per unit of risk. Sinher Technology is currently generating about -0.04 per unit of risk. If you would invest 812.00 in China Man Made Fiber on September 1, 2024 and sell it today you would earn a total of 7.00 from holding China Man Made Fiber or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
China Man Made Fiber vs. Sinher Technology
Performance |
| Timeline |
| China Man Made |
| Sinher Technology |
China Man and Sinher Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Man and Sinher Technology
The main advantage of trading using opposite China Man and Sinher Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Man position performs unexpectedly, Sinher Technology 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 Sinher Technology will offset losses from the drop in Sinher Technology's long position.| China Man vs. Oriental Union Chemical | China Man vs. China Petrochemical Development | China Man vs. Taiwan Styrene Monomer | China Man vs. Grand Pacific Petrochemical |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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