Correlation Between Sinomach General and Henzhen Zhaowei
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By analyzing existing cross correlation between Sinomach General Machinery and Henzhen Zhaowei Machinery, you can compare the effects of market volatilities on Sinomach General and Henzhen Zhaowei 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 Henzhen Zhaowei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach General and Henzhen Zhaowei.
Diversification Opportunities for Sinomach General and Henzhen Zhaowei
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sinomach and Henzhen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach General Machinery and Henzhen Zhaowei Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henzhen Zhaowei Machinery 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 Henzhen Zhaowei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henzhen Zhaowei Machinery has no effect on the direction of Sinomach General i.e., Sinomach General and Henzhen Zhaowei go up and down completely randomly.
Pair Corralation between Sinomach General and Henzhen Zhaowei
Assuming the 90 days trading horizon Sinomach General is expected to generate 2.16 times less return on investment than Henzhen Zhaowei. But when comparing it to its historical volatility, Sinomach General Machinery is 1.13 times less risky than Henzhen Zhaowei. It trades about 0.18 of its potential returns per unit of risk. Henzhen Zhaowei Machinery is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 3,912 in Henzhen Zhaowei Machinery on August 27, 2024 and sell it today you would earn a total of 3,571 from holding Henzhen Zhaowei Machinery or generate 91.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinomach General Machinery vs. Henzhen Zhaowei Machinery
Performance |
| Timeline |
| Sinomach General Mac |
| Henzhen Zhaowei Machinery |
Sinomach General and Henzhen Zhaowei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach General and Henzhen Zhaowei
The main advantage of trading using opposite Sinomach General and Henzhen Zhaowei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach General position performs unexpectedly, Henzhen Zhaowei 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 Henzhen Zhaowei will offset losses from the drop in Henzhen Zhaowei's long position.| Sinomach General vs. Agricultural Bank of | Sinomach General vs. Industrial and Commercial | Sinomach General vs. Bank of China | Sinomach General vs. China Construction Bank |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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