Correlation Between Sinomach Automobile and Dazhong Transportation
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By analyzing existing cross correlation between Sinomach Automobile Co and Dazhong Transportation Group, you can compare the effects of market volatilities on Sinomach Automobile and Dazhong Transportation 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 Dazhong Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach Automobile and Dazhong Transportation.
Diversification Opportunities for Sinomach Automobile and Dazhong Transportation
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sinomach and Dazhong is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach Automobile Co and Dazhong Transportation Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dazhong Transportation 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 Dazhong Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dazhong Transportation has no effect on the direction of Sinomach Automobile i.e., Sinomach Automobile and Dazhong Transportation go up and down completely randomly.
Pair Corralation between Sinomach Automobile and Dazhong Transportation
Assuming the 90 days trading horizon Sinomach Automobile Co is expected to under-perform the Dazhong Transportation. But the stock apears to be less risky and, when comparing its historical volatility, Sinomach Automobile Co is 1.02 times less risky than Dazhong Transportation. The stock trades about -0.02 of its potential returns per unit of risk. The Dazhong Transportation Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Dazhong Transportation Group on September 14, 2024 and sell it today you would earn a total of 7.00 from holding Dazhong Transportation Group or generate 36.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinomach Automobile Co vs. Dazhong Transportation Group
Performance |
| Timeline |
| Sinomach Automobile |
| Dazhong Transportation |
Sinomach Automobile and Dazhong Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach Automobile and Dazhong Transportation
The main advantage of trading using opposite Sinomach Automobile and Dazhong Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach Automobile position performs unexpectedly, Dazhong Transportation 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 Dazhong Transportation will offset losses from the drop in Dazhong Transportation's long position.| Sinomach Automobile vs. Kweichow Moutai Co | Sinomach Automobile vs. Contemporary Amperex Technology | Sinomach Automobile vs. G bits Network Technology | Sinomach Automobile vs. BYD Co Ltd |
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.
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