Correlation Between Sinomach Automobile and Suzhou Novoprotein

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Sinomach Automobile and Suzhou Novoprotein 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 Sinomach Automobile and Suzhou Novoprotein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinomach Automobile Co and Suzhou Novoprotein Scientific, you can compare the effects of market volatilities on Sinomach Automobile and Suzhou Novoprotein 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 Suzhou Novoprotein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach Automobile and Suzhou Novoprotein.

Diversification Opportunities for Sinomach Automobile and Suzhou Novoprotein

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Sinomach and Suzhou is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach Automobile Co and Suzhou Novoprotein Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Novoprotein 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 Suzhou Novoprotein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Novoprotein has no effect on the direction of Sinomach Automobile i.e., Sinomach Automobile and Suzhou Novoprotein go up and down completely randomly.

Pair Corralation between Sinomach Automobile and Suzhou Novoprotein

Assuming the 90 days trading horizon Sinomach Automobile Co is expected to generate 1.05 times more return on investment than Suzhou Novoprotein. However, Sinomach Automobile is 1.05 times more volatile than Suzhou Novoprotein Scientific. It trades about -0.03 of its potential returns per unit of risk. Suzhou Novoprotein Scientific is currently generating about -0.05 per unit of risk. If you would invest  923.00  in Sinomach Automobile Co on August 26, 2024 and sell it today you would lose (267.00) from holding Sinomach Automobile Co or give up 28.93% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Sinomach Automobile Co  vs.  Suzhou Novoprotein Scientific

 Performance 
       Timeline  
Sinomach Automobile 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Sinomach Automobile Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sinomach Automobile sustained solid returns over the last few months and may actually be approaching a breakup point.
Suzhou Novoprotein 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Suzhou Novoprotein Scientific are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Suzhou Novoprotein sustained solid returns over the last few months and may actually be approaching a breakup point.

Sinomach Automobile and Suzhou Novoprotein Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sinomach Automobile and Suzhou Novoprotein

The main advantage of trading using opposite Sinomach Automobile and Suzhou Novoprotein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach Automobile position performs unexpectedly, Suzhou Novoprotein 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 Suzhou Novoprotein will offset losses from the drop in Suzhou Novoprotein's long position.
The idea behind Sinomach Automobile Co and Suzhou Novoprotein Scientific 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

Other Complementary Tools

Bonds Directory
Find actively traded corporate debentures issued by US companies
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.