Correlation Between Rising Nonferrous and Sinofibers Technology
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By analyzing existing cross correlation between Rising Nonferrous Metals and Sinofibers Technology Co, you can compare the effects of market volatilities on Rising Nonferrous and Sinofibers Technology 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 Rising Nonferrous with a short position of Sinofibers Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rising Nonferrous and Sinofibers Technology.
Diversification Opportunities for Rising Nonferrous and Sinofibers Technology
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Rising and Sinofibers is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Rising Nonferrous Metals and Sinofibers Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinofibers Technology and Rising Nonferrous 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 Rising Nonferrous Metals are associated (or correlated) with Sinofibers Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinofibers Technology has no effect on the direction of Rising Nonferrous i.e., Rising Nonferrous and Sinofibers Technology go up and down completely randomly.
Pair Corralation between Rising Nonferrous and Sinofibers Technology
Assuming the 90 days trading horizon Rising Nonferrous Metals is expected to under-perform the Sinofibers Technology. But the stock apears to be less risky and, when comparing its historical volatility, Rising Nonferrous Metals is 1.08 times less risky than Sinofibers Technology. The stock trades about -0.12 of its potential returns per unit of risk. The Sinofibers Technology Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 3,070 in Sinofibers Technology Co on November 7, 2024 and sell it today you would lose (239.00) from holding Sinofibers Technology Co or give up 7.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rising Nonferrous Metals vs. Sinofibers Technology Co
Performance |
| Timeline |
| Rising Nonferrous Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sinofibers Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rising Nonferrous and Sinofibers Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rising Nonferrous and Sinofibers Technology
The main advantage of trading using opposite Rising Nonferrous and Sinofibers Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rising Nonferrous position performs unexpectedly, Sinofibers Technology 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 Sinofibers Technology will offset losses from the drop in Sinofibers Technology's long position.The idea behind Rising Nonferrous Metals and Sinofibers Technology 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.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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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