Correlation Between Sinomach Automobile and China Enterprise
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By analyzing existing cross correlation between Sinomach Automobile Co and China Enterprise Co, you can compare the effects of market volatilities on Sinomach Automobile and China Enterprise 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 China Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach Automobile and China Enterprise.
Diversification Opportunities for Sinomach Automobile and China Enterprise
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sinomach and China is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach Automobile Co and China Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Enterprise 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 China Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Enterprise has no effect on the direction of Sinomach Automobile i.e., Sinomach Automobile and China Enterprise go up and down completely randomly.
Pair Corralation between Sinomach Automobile and China Enterprise
Assuming the 90 days trading horizon Sinomach Automobile Co is expected to generate 1.01 times more return on investment than China Enterprise. However, Sinomach Automobile is 1.01 times more volatile than China Enterprise Co. It trades about 0.02 of its potential returns per unit of risk. China Enterprise Co is currently generating about -0.04 per unit of risk. If you would invest 654.00 in Sinomach Automobile Co on September 28, 2024 and sell it today you would earn a total of 3.00 from holding Sinomach Automobile Co or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinomach Automobile Co vs. China Enterprise Co
Performance |
| Timeline |
| Sinomach Automobile |
| China Enterprise |
Sinomach Automobile and China Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach Automobile and China Enterprise
The main advantage of trading using opposite Sinomach Automobile and China Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach Automobile position performs unexpectedly, China Enterprise 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 China Enterprise will offset losses from the drop in China Enterprise's long position.| Sinomach Automobile vs. Guangdong Jingyi Metal | Sinomach Automobile vs. Wuhan Hvsen Biotechnology | Sinomach Automobile vs. Ningbo MedicalSystem Biotechnology | Sinomach Automobile vs. Ningbo Ligong Online |
| China Enterprise vs. INKON Life Technology | China Enterprise vs. Chahua Modern Housewares | China Enterprise vs. Anhui Deli Household | China Enterprise vs. China World Trade |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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