Correlation Between Sinofibers Technology and Gem Year
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By analyzing existing cross correlation between Sinofibers Technology Co and Gem Year Industrial Co, you can compare the effects of market volatilities on Sinofibers Technology and Gem Year 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 Gem Year. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinofibers Technology and Gem Year.
Diversification Opportunities for Sinofibers Technology and Gem Year
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sinofibers and Gem is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sinofibers Technology Co and Gem Year Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gem Year Industrial 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 Gem Year. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gem Year Industrial has no effect on the direction of Sinofibers Technology i.e., Sinofibers Technology and Gem Year go up and down completely randomly.
Pair Corralation between Sinofibers Technology and Gem Year
Assuming the 90 days trading horizon Sinofibers Technology Co is expected to generate 1.03 times more return on investment than Gem Year. However, Sinofibers Technology is 1.03 times more volatile than Gem Year Industrial Co. It trades about 0.38 of its potential returns per unit of risk. Gem Year Industrial Co is currently generating about 0.23 per unit of risk. If you would invest 2,638 in Sinofibers Technology Co on December 11, 2024 and sell it today you would earn a total of 1,041 from holding Sinofibers Technology Co or generate 39.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinofibers Technology Co vs. Gem Year Industrial Co
Performance |
| Timeline |
| Sinofibers Technology |
| Gem Year Industrial |
Sinofibers Technology and Gem Year Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinofibers Technology and Gem Year
The main advantage of trading using opposite Sinofibers Technology and Gem Year positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinofibers Technology position performs unexpectedly, Gem Year 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 Gem Year will offset losses from the drop in Gem Year's long position.The idea behind Sinofibers Technology Co and Gem Year Industrial Co 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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