Correlation Between Sinofibers Technology and Guangzhou Jointas
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By analyzing existing cross correlation between Sinofibers Technology Co and Guangzhou Jointas Chemical, you can compare the effects of market volatilities on Sinofibers Technology and Guangzhou Jointas 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 Guangzhou Jointas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinofibers Technology and Guangzhou Jointas.
Diversification Opportunities for Sinofibers Technology and Guangzhou Jointas
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sinofibers and Guangzhou is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sinofibers Technology Co and Guangzhou Jointas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jointas 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 Guangzhou Jointas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jointas has no effect on the direction of Sinofibers Technology i.e., Sinofibers Technology and Guangzhou Jointas go up and down completely randomly.
Pair Corralation between Sinofibers Technology and Guangzhou Jointas
Assuming the 90 days trading horizon Sinofibers Technology is expected to generate 1.12 times less return on investment than Guangzhou Jointas. In addition to that, Sinofibers Technology is 1.36 times more volatile than Guangzhou Jointas Chemical. It trades about 0.04 of its total potential returns per unit of risk. Guangzhou Jointas Chemical is currently generating about 0.05 per unit of volatility. If you would invest 479.00 in Guangzhou Jointas Chemical on August 31, 2024 and sell it today you would earn a total of 70.00 from holding Guangzhou Jointas Chemical or generate 14.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinofibers Technology Co vs. Guangzhou Jointas Chemical
Performance |
| Timeline |
| Sinofibers Technology |
| Guangzhou Jointas |
Sinofibers Technology and Guangzhou Jointas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinofibers Technology and Guangzhou Jointas
The main advantage of trading using opposite Sinofibers Technology and Guangzhou Jointas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinofibers Technology position performs unexpectedly, Guangzhou Jointas 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 Guangzhou Jointas will offset losses from the drop in Guangzhou Jointas' long position.The idea behind Sinofibers Technology Co and Guangzhou Jointas Chemical 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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