Correlation Between Sinomach Automobile and Loctek Ergonomic
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By analyzing existing cross correlation between Sinomach Automobile Co and Loctek Ergonomic Technology, you can compare the effects of market volatilities on Sinomach Automobile and Loctek Ergonomic 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 Loctek Ergonomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach Automobile and Loctek Ergonomic.
Diversification Opportunities for Sinomach Automobile and Loctek Ergonomic
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sinomach and Loctek is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach Automobile Co and Loctek Ergonomic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loctek Ergonomic Tec 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 Loctek Ergonomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loctek Ergonomic Tec has no effect on the direction of Sinomach Automobile i.e., Sinomach Automobile and Loctek Ergonomic go up and down completely randomly.
Pair Corralation between Sinomach Automobile and Loctek Ergonomic
Assuming the 90 days trading horizon Sinomach Automobile Co is expected to generate 1.14 times more return on investment than Loctek Ergonomic. However, Sinomach Automobile is 1.14 times more volatile than Loctek Ergonomic Technology. It trades about -0.13 of its potential returns per unit of risk. Loctek Ergonomic Technology is currently generating about -0.17 per unit of risk. If you would invest 669.00 in Sinomach Automobile Co on October 25, 2024 and sell it today you would lose (42.00) from holding Sinomach Automobile Co or give up 6.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinomach Automobile Co vs. Loctek Ergonomic Technology
Performance |
| Timeline |
| Sinomach Automobile |
| Loctek Ergonomic Tec |
Sinomach Automobile and Loctek Ergonomic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach Automobile and Loctek Ergonomic
The main advantage of trading using opposite Sinomach Automobile and Loctek Ergonomic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach Automobile position performs unexpectedly, Loctek Ergonomic 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 Loctek Ergonomic will offset losses from the drop in Loctek Ergonomic's long position.| Sinomach Automobile vs. PetroChina Co Ltd | Sinomach Automobile vs. Gansu Jiu Steel | Sinomach Automobile vs. Ming Yang Smart | Sinomach Automobile vs. Aba Chemicals Corp |
| Loctek Ergonomic vs. Shanghai Rongtai Health | Loctek Ergonomic vs. Humanwell Healthcare Group | Loctek Ergonomic vs. Yunnan Jianzhijia Health Chain | Loctek Ergonomic vs. Impulse Qingdao Health |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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