Correlation Between Sinotruk (Hong and NorAm Drilling
Can any of the company-specific risk be diversified away by investing in both Sinotruk (Hong and NorAm Drilling 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 Sinotruk (Hong and NorAm Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinotruk Limited and NorAm Drilling AS, you can compare the effects of market volatilities on Sinotruk (Hong and NorAm Drilling 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 Sinotruk (Hong with a short position of NorAm Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinotruk (Hong and NorAm Drilling.
Diversification Opportunities for Sinotruk (Hong and NorAm Drilling
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sinotruk and NorAm is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sinotruk Limited and NorAm Drilling AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorAm Drilling AS and Sinotruk (Hong 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 Sinotruk Limited are associated (or correlated) with NorAm Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorAm Drilling AS has no effect on the direction of Sinotruk (Hong i.e., Sinotruk (Hong and NorAm Drilling go up and down completely randomly.
Pair Corralation between Sinotruk (Hong and NorAm Drilling
Assuming the 90 days horizon Sinotruk Limited is expected to generate 0.58 times more return on investment than NorAm Drilling. However, Sinotruk Limited is 1.73 times less risky than NorAm Drilling. It trades about 0.14 of its potential returns per unit of risk. NorAm Drilling AS is currently generating about 0.01 per unit of risk. If you would invest 250.00 in Sinotruk Limited on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Sinotruk Limited or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinotruk Limited vs. NorAm Drilling AS
Performance |
| Timeline |
| Sinotruk Limited |
| NorAm Drilling AS |
Sinotruk (Hong and NorAm Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinotruk (Hong and NorAm Drilling
The main advantage of trading using opposite Sinotruk (Hong and NorAm Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinotruk (Hong position performs unexpectedly, NorAm Drilling 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 NorAm Drilling will offset losses from the drop in NorAm Drilling's long position.| Sinotruk (Hong vs. KION Group AG | Sinotruk (Hong vs. Hyster Yale Materials Handling | Sinotruk (Hong vs. Superior Plus Corp | Sinotruk (Hong vs. NMI Holdings |
| NorAm Drilling vs. Air Transport Services | NorAm Drilling vs. Pembina Pipeline Corp | NorAm Drilling vs. NAKED WINES PLC | NorAm Drilling vs. Fukuyama Transporting Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |