Correlation Between Sinomach General and Shandong Polymer
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By analyzing existing cross correlation between Sinomach General Machinery and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Sinomach General and Shandong Polymer 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 General with a short position of Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach General and Shandong Polymer.
Diversification Opportunities for Sinomach General and Shandong Polymer
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sinomach and Shandong is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach General Machinery and Shandong Polymer Biochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Polymer Bio and Sinomach General 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 General Machinery are associated (or correlated) with Shandong Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Polymer Bio has no effect on the direction of Sinomach General i.e., Sinomach General and Shandong Polymer go up and down completely randomly.
Pair Corralation between Sinomach General and Shandong Polymer
Assuming the 90 days trading horizon Sinomach General Machinery is expected to generate 0.97 times more return on investment than Shandong Polymer. However, Sinomach General Machinery is 1.03 times less risky than Shandong Polymer. It trades about -0.2 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about -0.21 per unit of risk. If you would invest 1,855 in Sinomach General Machinery on October 12, 2024 and sell it today you would lose (401.00) from holding Sinomach General Machinery or give up 21.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinomach General Machinery vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| Sinomach General Mac |
| Shandong Polymer Bio |
Sinomach General and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach General and Shandong Polymer
The main advantage of trading using opposite Sinomach General and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach General position performs unexpectedly, Shandong Polymer 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 Shandong Polymer will offset losses from the drop in Shandong Polymer's long position.| Sinomach General vs. Yunnan Jianzhijia Health Chain | Sinomach General vs. Shanghai Rongtai Health | Sinomach General vs. De Rucci Healthy | Sinomach General vs. Dezhan HealthCare Co |
| Shandong Polymer vs. Zijin Mining Group | Shandong Polymer vs. Wanhua Chemical Group | Shandong Polymer vs. Baoshan Iron Steel | Shandong Polymer vs. Rongsheng Petrochemical Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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