Correlation Between Sinomach Automobile and Rongsheng Petrochemical
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By analyzing existing cross correlation between Sinomach Automobile Co and Rongsheng Petrochemical Co, you can compare the effects of market volatilities on Sinomach Automobile and Rongsheng Petrochemical 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 Sinomach Automobile with a short position of Rongsheng Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach Automobile and Rongsheng Petrochemical.
Diversification Opportunities for Sinomach Automobile and Rongsheng Petrochemical
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sinomach and Rongsheng is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach Automobile Co and Rongsheng Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rongsheng Petrochemical and Sinomach Automobile 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 Sinomach Automobile Co are associated (or correlated) with Rongsheng Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rongsheng Petrochemical has no effect on the direction of Sinomach Automobile i.e., Sinomach Automobile and Rongsheng Petrochemical go up and down completely randomly.
Pair Corralation between Sinomach Automobile and Rongsheng Petrochemical
Assuming the 90 days trading horizon Sinomach Automobile Co is expected to under-perform the Rongsheng Petrochemical. In addition to that, Sinomach Automobile is 1.44 times more volatile than Rongsheng Petrochemical Co. It trades about -0.04 of its total potential returns per unit of risk. Rongsheng Petrochemical Co is currently generating about -0.03 per unit of volatility. If you would invest 965.00 in Rongsheng Petrochemical Co on August 29, 2024 and sell it today you would lose (13.00) from holding Rongsheng Petrochemical Co or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinomach Automobile Co vs. Rongsheng Petrochemical Co
Performance |
| Timeline |
| Sinomach Automobile |
| Rongsheng Petrochemical |
Sinomach Automobile and Rongsheng Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach Automobile and Rongsheng Petrochemical
The main advantage of trading using opposite Sinomach Automobile and Rongsheng Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach Automobile position performs unexpectedly, Rongsheng Petrochemical 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 Rongsheng Petrochemical will offset losses from the drop in Rongsheng Petrochemical's long position.| Sinomach Automobile vs. Agricultural Bank of | Sinomach Automobile vs. Industrial and Commercial | Sinomach Automobile vs. Bank of China | Sinomach Automobile vs. China Construction Bank |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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