Correlation Between Aba Chemicals and Sinocat Environmental
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By analyzing existing cross correlation between Aba Chemicals Corp and Sinocat Environmental Technology, you can compare the effects of market volatilities on Aba Chemicals and Sinocat Environmental 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 Aba Chemicals with a short position of Sinocat Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Sinocat Environmental.
Diversification Opportunities for Aba Chemicals and Sinocat Environmental
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aba and Sinocat is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Sinocat Environmental Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinocat Environmental and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Sinocat Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinocat Environmental has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Sinocat Environmental go up and down completely randomly.
Pair Corralation between Aba Chemicals and Sinocat Environmental
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Sinocat Environmental. In addition to that, Aba Chemicals is 1.03 times more volatile than Sinocat Environmental Technology. It trades about -0.1 of its total potential returns per unit of risk. Sinocat Environmental Technology is currently generating about 0.03 per unit of volatility. If you would invest 1,614 in Sinocat Environmental Technology on November 4, 2024 and sell it today you would earn a total of 13.00 from holding Sinocat Environmental Technology or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Sinocat Environmental Technolo
Performance |
| Timeline |
| Aba Chemicals Corp |
| Sinocat Environmental |
Aba Chemicals and Sinocat Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Sinocat Environmental
The main advantage of trading using opposite Aba Chemicals and Sinocat Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Sinocat Environmental 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 Sinocat Environmental will offset losses from the drop in Sinocat Environmental's long position.| Aba Chemicals vs. Tongyu Communication | Aba Chemicals vs. Eyebright Medical Technology | Aba Chemicals vs. China Sports Industry | Aba Chemicals vs. Fujian Newland Computer |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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