Correlation Between Sinofibers Technology and City Development
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By analyzing existing cross correlation between Sinofibers Technology Co and City Development Environment, you can compare the effects of market volatilities on Sinofibers Technology and City Development 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 City Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinofibers Technology and City Development.
Diversification Opportunities for Sinofibers Technology and City Development
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sinofibers and City is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sinofibers Technology Co and City Development Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Development Env 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 City Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Development Env has no effect on the direction of Sinofibers Technology i.e., Sinofibers Technology and City Development go up and down completely randomly.
Pair Corralation between Sinofibers Technology and City Development
Assuming the 90 days trading horizon Sinofibers Technology Co is expected to generate 1.7 times more return on investment than City Development. However, Sinofibers Technology is 1.7 times more volatile than City Development Environment. It trades about 0.15 of its potential returns per unit of risk. City Development Environment is currently generating about 0.09 per unit of risk. If you would invest 2,712 in Sinofibers Technology Co on November 5, 2024 and sell it today you would earn a total of 119.00 from holding Sinofibers Technology Co or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinofibers Technology Co vs. City Development Environment
Performance |
| Timeline |
| Sinofibers Technology |
| City Development Env |
Sinofibers Technology and City Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinofibers Technology and City Development
The main advantage of trading using opposite Sinofibers Technology and City Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinofibers Technology position performs unexpectedly, City Development 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 City Development will offset losses from the drop in City Development's long position.The idea behind Sinofibers Technology Co and City Development Environment 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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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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