Correlation Between Grand Plastic and Sino American
Can any of the company-specific risk be diversified away by investing in both Grand Plastic and Sino American at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Grand Plastic and Sino American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Plastic Technology and Sino American Silicon Products, you can compare the effects of market volatilities on Grand Plastic and Sino American 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 Grand Plastic with a short position of Sino American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Plastic and Sino American.
Diversification Opportunities for Grand Plastic and Sino American
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grand and Sino is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Grand Plastic Technology and Sino American Silicon Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino American Silicon and Grand Plastic 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 Grand Plastic Technology are associated (or correlated) with Sino American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino American Silicon has no effect on the direction of Grand Plastic i.e., Grand Plastic and Sino American go up and down completely randomly.
Pair Corralation between Grand Plastic and Sino American
Assuming the 90 days trading horizon Grand Plastic Technology is expected to generate 2.31 times more return on investment than Sino American. However, Grand Plastic is 2.31 times more volatile than Sino American Silicon Products. It trades about 0.1 of its potential returns per unit of risk. Sino American Silicon Products is currently generating about -0.01 per unit of risk. If you would invest 58,276 in Grand Plastic Technology on September 12, 2024 and sell it today you would earn a total of 116,724 from holding Grand Plastic Technology or generate 200.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Plastic Technology vs. Sino American Silicon Products
Performance |
| Timeline |
| Grand Plastic Technology |
| Sino American Silicon |
Grand Plastic and Sino American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Plastic and Sino American
The main advantage of trading using opposite Grand Plastic and Sino American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Plastic position performs unexpectedly, Sino American 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 Sino American will offset losses from the drop in Sino American's long position.| Grand Plastic vs. Sino American Silicon Products | Grand Plastic vs. Elan Microelectronics Corp | Grand Plastic vs. Greatek Electronics | Grand Plastic vs. Ruentex Development Co |
| Sino American vs. Elan Microelectronics Corp | Sino American vs. Greatek Electronics | Sino American vs. Ruentex Development Co | Sino American vs. WiseChip Semiconductor |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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