Correlation Between YiDong Electronics and Sinomach General
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By analyzing existing cross correlation between YiDong Electronics Technology and Sinomach General Machinery, you can compare the effects of market volatilities on YiDong Electronics and Sinomach General 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 YiDong Electronics with a short position of Sinomach General. Check out your portfolio center. Please also check ongoing floating volatility patterns of YiDong Electronics and Sinomach General.
Diversification Opportunities for YiDong Electronics and Sinomach General
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between YiDong and Sinomach is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding YiDong Electronics Technology and Sinomach General Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach General Mac and YiDong Electronics 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 YiDong Electronics Technology are associated (or correlated) with Sinomach General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach General Mac has no effect on the direction of YiDong Electronics i.e., YiDong Electronics and Sinomach General go up and down completely randomly.
Pair Corralation between YiDong Electronics and Sinomach General
Assuming the 90 days trading horizon YiDong Electronics Technology is expected to under-perform the Sinomach General. In addition to that, YiDong Electronics is 3.73 times more volatile than Sinomach General Machinery. It trades about -0.01 of its total potential returns per unit of risk. Sinomach General Machinery is currently generating about 0.24 per unit of volatility. If you would invest 1,409 in Sinomach General Machinery on November 7, 2024 and sell it today you would earn a total of 102.00 from holding Sinomach General Machinery or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YiDong Electronics Technology vs. Sinomach General Machinery
Performance |
| Timeline |
| YiDong Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Sinomach General Mac |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
YiDong Electronics and Sinomach General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YiDong Electronics and Sinomach General
The main advantage of trading using opposite YiDong Electronics and Sinomach General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YiDong Electronics position performs unexpectedly, Sinomach General 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 Sinomach General will offset losses from the drop in Sinomach General's long position.The idea behind YiDong Electronics Technology and Sinomach General Machinery 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.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 Transaction History module to view history of all your transactions and understand their impact on performance.
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