Correlation Between Sinofibers Technology and Haima Automobile

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Can any of the company-specific risk be diversified away by investing in both Sinofibers Technology and Haima Automobile 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 Sinofibers Technology and Haima Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinofibers Technology Co and Haima Automobile Group, you can compare the effects of market volatilities on Sinofibers Technology and Haima 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 Sinofibers Technology with a short position of Haima Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinofibers Technology and Haima Automobile.

Diversification Opportunities for Sinofibers Technology and Haima Automobile

SinofibersHaimaDiversified AwaySinofibersHaimaDiversified Away100%
0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Sinofibers and Haima is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sinofibers Technology Co and Haima Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haima Automobile and Sinofibers Technology 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 Sinofibers Technology Co are associated (or correlated) with Haima Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haima Automobile has no effect on the direction of Sinofibers Technology i.e., Sinofibers Technology and Haima Automobile go up and down completely randomly.

Pair Corralation between Sinofibers Technology and Haima Automobile

Assuming the 90 days trading horizon Sinofibers Technology Co is expected to under-perform the Haima Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Sinofibers Technology Co is 1.2 times less risky than Haima Automobile. The stock trades about -0.02 of its potential returns per unit of risk. The Haima Automobile Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  426.00  in Haima Automobile Group on November 17, 2024 and sell it today you would lose (11.00) from holding Haima Automobile Group or give up 2.58% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Sinofibers Technology Co  vs.  Haima Automobile Group

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025 -30-20-100
JavaScript chart by amCharts 3.21.15300777 000572
       Timeline  
Sinofibers Technology 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Sinofibers Technology Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sinofibers Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb26272829303132
Haima Automobile 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Haima Automobile Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Haima Automobile is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.844.24.44.64.855.2

Sinofibers Technology and Haima Automobile Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.75-2.81-1.87-0.93-0.01540.911.832.753.67 0.040.050.060.07
JavaScript chart by amCharts 3.21.15300777 000572
       Returns  

Pair Trading with Sinofibers Technology and Haima Automobile

The main advantage of trading using opposite Sinofibers Technology and Haima Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinofibers Technology position performs unexpectedly, Haima 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 Haima Automobile will offset losses from the drop in Haima Automobile's long position.
The idea behind Sinofibers Technology Co and Haima Automobile Group 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.
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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