Correlation Between Sheng Yu and GeneReach Biotechnology
Can any of the company-specific risk be diversified away by investing in both Sheng Yu and GeneReach Biotechnology 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 Sheng Yu and GeneReach Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sheng Yu Steel and GeneReach Biotechnology, you can compare the effects of market volatilities on Sheng Yu and GeneReach Biotechnology 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 Sheng Yu with a short position of GeneReach Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sheng Yu and GeneReach Biotechnology.
Diversification Opportunities for Sheng Yu and GeneReach Biotechnology
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sheng and GeneReach is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sheng Yu Steel and GeneReach Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneReach Biotechnology and Sheng Yu 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 Sheng Yu Steel are associated (or correlated) with GeneReach Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneReach Biotechnology has no effect on the direction of Sheng Yu i.e., Sheng Yu and GeneReach Biotechnology go up and down completely randomly.
Pair Corralation between Sheng Yu and GeneReach Biotechnology
Assuming the 90 days trading horizon Sheng Yu Steel is expected to under-perform the GeneReach Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Sheng Yu Steel is 3.25 times less risky than GeneReach Biotechnology. The stock trades about -0.34 of its potential returns per unit of risk. The GeneReach Biotechnology is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,580 in GeneReach Biotechnology on October 16, 2024 and sell it today you would earn a total of 215.00 from holding GeneReach Biotechnology or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sheng Yu Steel vs. GeneReach Biotechnology
Performance |
| Timeline |
| Sheng Yu Steel |
| GeneReach Biotechnology |
Sheng Yu and GeneReach Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sheng Yu and GeneReach Biotechnology
The main advantage of trading using opposite Sheng Yu and GeneReach Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sheng Yu position performs unexpectedly, GeneReach Biotechnology 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 GeneReach Biotechnology will offset losses from the drop in GeneReach Biotechnology's long position.| Sheng Yu vs. Basso Industry Corp | Sheng Yu vs. Chung Hsin Electric Machinery | Sheng Yu vs. TECO Electric Machinery |
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 Directory module to find actively traded commodities issued by global exchanges.
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