Correlation Between Sinofibers Technology and Industrial
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By analyzing existing cross correlation between Sinofibers Technology Co and Industrial and Commercial, you can compare the effects of market volatilities on Sinofibers Technology and Industrial 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 Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinofibers Technology and Industrial.
Diversification Opportunities for Sinofibers Technology and Industrial
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sinofibers and Industrial is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sinofibers Technology Co and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial 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 Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of Sinofibers Technology i.e., Sinofibers Technology and Industrial go up and down completely randomly.
Pair Corralation between Sinofibers Technology and Industrial
Assuming the 90 days trading horizon Sinofibers Technology Co is expected to under-perform the Industrial. In addition to that, Sinofibers Technology is 3.63 times more volatile than Industrial and Commercial. It trades about -0.2 of its total potential returns per unit of risk. Industrial and Commercial is currently generating about -0.01 per unit of volatility. If you would invest 607.00 in Industrial and Commercial on August 27, 2024 and sell it today you would lose (2.00) from holding Industrial and Commercial or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinofibers Technology Co vs. Industrial and Commercial
Performance |
| Timeline |
| Sinofibers Technology |
| Industrial and Commercial |
Sinofibers Technology and Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinofibers Technology and Industrial
The main advantage of trading using opposite Sinofibers Technology and Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinofibers Technology position performs unexpectedly, Industrial 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 Industrial will offset losses from the drop in Industrial's long position.The idea behind Sinofibers Technology Co and Industrial and Commercial 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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